International real estate advisor Savills has been appointed by a private overseas investor to sell the freehold in 63 St James’s Street, a super-prime office building in the West End of London, for offers over £61 million.
The property comprises 22,151 sq ft of Grade A office accommodation arranged over lower ground, ground and six upper floors, in addition to an extensive terrace. It was refurbished to best-in-class standard in 2021 and is now fully electric.
The property, which is fully let to five investment grade-level tenants at a low average rent of £118 per sq ft, carries unusually substantial rental growth prospects, with surrounding prime rents standing at over £225 per sq ft. In addition, 68% of the income is subject to lease events over the next 18 months and further rental growth of 21% forecast in St James’s over the next five years.
The guide price represents a net initial yield of 4.06% and a compelling capital value of £2,753 per sq ft, which benchmarks favourably versus surrounding core evidence of close to £4,000 per sq ft.
James Purdon, director in the Central London Investment team at Savills, comments: “In addition to being one of only three freehold office buildings on St James’s Street, it is extremely rare to find a recently refurbished, de-risked asset of this quality that carries quite such exceptional – and imminent – reversion.
“We are anticipating an accordingly strong response from both international and domestic investors seeking wealth preservation, enduring liquidity and substantial near-term rental growth.”