The Burlian drives investment volume in November
Savills recorded £350 million of investment volume across ten transactions in November. Cumulative investment volumes now stand at £4.6 billion year to date, with an average lot size of £45 million, down 9% on the ten-year average and up 16% on the five-year average.
Liquidity has been strongest in the sub-£20 million lot size range, accounting for 49% of transactions by number. However, overall investment volume has been driven by the ten transactions above £100 million, representing 51% of total volume year to date.
In terms of investor geography, UK investors have led disposal volumes, accounting for 68% of total investment volume, with North American capital representing a further 16%. On the acquisition side, activity has been more evenly distributed, with UK investors again leading at 40% of volume, closely followed by European buyers at 37%. Asian and North American investors each accounted for 10% of acquisition volume.
Hines sold its freehold interest in The Burlian, 80 New Bond Street, W1, off-market, to Allwyn, one of the office occupiers, for £195 million, reflecting 3.69% and £4,630 per sq ft, equating to 56% of investment volume in November. The building was redeveloped in 2023, providing 42,121 sq ft of Grade A office and flagship retail accommodation. The building is multi-let to three office tenants and the retail is let to Abercrombie & Fitch, generating a total rent of £7.3 million per annum and providing a WAULT of 6.1 years to the earliest tenant break options.
USS sold its virtual freehold interest (954 years unexpired at a peppercorn rent) in 7 Savoy Court, WC2, for £50.25 million, reflecting 6.64% and £895 per sq ft. The property comprises 56,132 sq ft of office and retail accommodation, multi-let across six office floors (including one vacant floor) and eight retail units, producing a total topped-up income of £3,560,333 per annum, reflecting £59 per sq ft on the offices and an office WAULT of 3.1 years to the earliest tenant break options.
Aviva sold its freehold interest in 127–133 Wardour Street, W1, to DWI for £28.5 million, reflecting £1,245 per sq ft. The property comprises 22,893 sq ft of office accommodation and is offered with full vacant possession, presenting an opportunity to reposition the asset through the creation of an additional floor, communal and private terraces, and end-of-trip facilities.
In November, there were five new sales brought forward, of which the most notable was GPE’s sale of Wells & More, 45 Mortimer Street, W1 (quoting £180 million, 4.79% and £1,552 per sq ft). Wells & More comprises 116,000 sq ft of office, retail, medical and residential accommodation. The property is multi-let to six office tenants, two medical tenants and two retail tenants, in addition to two vacant office units and residential held on long leaseholds. The total topped-up income is £9,200,267 per annum, reflecting £91.17 per sq ft on the offices and providing a WAULT of 4.6 years to the earliest tenant break options.
Savills prime yield remains at 3.75%, while the five-year SONIA swap rate stands at 3.63%.