Pension fund invests in London offices
The Universities Superannuation Scheme (USS) has purchased a premium London office building.
The USS is the principal final salary pension scheme provided by Universities and other associated institutions for their employees. The USS has agreed to purchase Savoy Court, a premium office building for a total of £45.4million and expects a return yield from rental income of 6.25%. The figures equate to an approximate rental price of £49 /sq ft for the combined floor space.
Seven Savoy Court (website) is adjacent to the Savoy Hotel in London’s West End and offers approximately 53,000 sq ft of Grade A office accommodation over 8 floors. The largest floor plates within the building are just over 8,000 sq ft.
The building, which underwent a major internal refurbishment in 2008, also has approximately 5,000 sq ft of retail floor space. The headquarters style offices are currently let until 2017 to Booz & Co, a global management consulting firm.
The purchase marks the first acquisition by USS since it purchased the National Magazine House in May 2010 for over £40million. National Magazine House, located on The Carnaby Estate in Soho is another Grade A office building comprising of approximately 54,000 sq ft of space over 5 floors. USS is assumed to receive rental income of approximately £44 / sq ft from a lease agreement that expires in 2018.
Speaking of the latest acquisition Alex Turner, office fund manager at USS, said: ” This acquisition takes our central London office acquisitions in 2010 to over £150m, reflecting our confidence in the continued resilience of this sub sector.”
The previous owner of the offices was Redevco, a property investment company predominately operating within the retail property sector.
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