Investment Completion: Mixed-Use Property in London's Cannon Street

News: Investment News | 26 June 2018

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Connection Capital spots right time, right place with purchase of £47m mixed-use property on London’s Cannon Street

  • Private investors seize opportunity to invest in prime location in heart of the City

Connection Capital’s private investors have seized the opportunity to invest in a 57,777 square foot mixed-use property on London’s Cannon Street, in the heart of the City, purchased for £47million for clients of the specialist private client investment business by its property partner, Riverside Capital.
Connection Capital clients were able to invest in tranches of £25,000 in Sherborne House, an attractive eight storey freehold office and retail building with a historic façade and a modern interior located close to the Bank of England, the London Stock Exchange and St Paul’s Cathedral.

The purchase price equates to around £800 per square foot (‘psf’), which compares favourably with other nearby buildings currently on the market or recently sold.

Connection Capital says that the property is in a prime location for rental and capital growth. Recent developments in the immediate vicinity include Bloomberg’s new £1billion European HQ and the Walbrook Building (both designed by Foster + Partners) and the 5* Ned hotel and private members’ club located in the Lutyens-designed 1924 former Midland Bank building.

It is anticipated that these developments will enhance the appeal of the Cannon Street area in much the same way as the Shard has transformed Southwark. Today the location is as much a hub for tech and media businesses as for financial services firms, for example, Deliveroo has offices on Cannon Street.

The property will also benefit from the current redevelopment of Bank Underground Station, one of whose new entrances will be adjacent to it. This will further enhance the location’s already excellent transport links.

Currently let to a range of tenants across different industry sectors, including Holland & Barrett, Fullers’ pubs and law firm Forresters, the mixed-use and multi-let nature of the investment reduces tenant risk and improves cashflows through diversification.

Connection Capital and Riverside Capital plan to create additional value by an active asset management strategy, which will include refurbishing office space as it becomes vacant so that it can be re-let at a higher price psf.

Claire Madden, Managing Partner at Connection Capital comments, “How often do private investors get the chance to invest in a high-grade commercial property at a well-known City address - one of the most vibrant business locations in the world - offering significant potential for income and capital growth? Almost never.”

“In the current central London commercial property market, where supply and demand are relatively stable, the skill is to spot the specific locations and properties that will be winners. We believe this investment offers the optimum mix of ‘right time, right place’, with real and growing tenant-appeal and excellent, improving transport connectivity.”

Dominic Wright, CEO at Riverside Capital comments, “Our view is that, while the overall London commercial property market remains benign, certain micro-locations have the potential to outperform. We see Cannon Street as one such location, driven by top-end new developments in the area, an increasingly diverse tenant mix and outstanding transport infrastructure.”

“It’s an exciting opportunity for private investors and one which has been well-received by Connection Capital’s clients.”

Other commercial property investments made by Connection Capital, include property tenanted by Travelodge, DPD, Aldi, Premier Inn and Travis Perkins.