Investment Completion - Old Street Works
26 July 2017
Private investors take a slice of Tech City with purchase of £27.5million office and retail property
Private investors have bought a slice of London’s Tech City by acquiring a £27.5million multi-let office and retail property just off Old Street roundabout, through Connection Capital, the specialist private client investment business.
“Old Street Works” is a 33,179 sq. ft. former Victorian warehouse over six floors. Current tenants include technology, media, telecoms, marketing and design companies as well as Nando’s restaurant.
Connection Capital says the investment offers substantial scope for rental and capital growth. One reason is that it has just been extensively refurbished and there is also potential to extend the floorspace further.
Its location near “Silicon Roundabout” – the world’s third largest start-up cluster, and a hotspot for technology and creative companies - means demand for office and retail space is likely to remain strong. Employment levels in this area are growing faster than in Silicon Valley or New York.
The immediate area has also been transformed in recent years with the likes of Google opening offices, and as the tech ecosystem has developed, it has become a highly desirable location. Continued regeneration and development is likely to strengthen values further looking forward.
Connection Capital says that headline office rents in the area have risen 18% over the past 12 months, putting them on a par with, or in some cases exceeding, those achieved in the City of London. Vacancy rates in the area are less than 1%.
The opportunity was secured “off-market” by Riverside Capital, Connection Capital’s property partner. Riverside Capital has a long track record in the London office sector, particularly in assets that require hands-on asset management. Connection Capital clients were able to invest in tranches of £25,000.
Claire Madden, Partner at Connection Capital says, “This is an exciting opportunity for our clients to invest in a substantial and prominent premises right in the capital’s booming tech heartland.”
“Having secured the purchase at an attractive entry price, there is real scope to add value, given the potential to enhance the rent roll and expand the space.”
“And occupier demand looks well-placed to withstand Brexit, with many of the world’s biggest tech companies having sited their European headquarters in London and with the UK tech industry growing at twice the rate of the wider economy. Continued regeneration should make this an increasingly sought-after location to live and work, so all in all, it’s the kind of deal that private investors are very keen to access."
If you are interested in receiving more information about future investment opportunities and are not yet a client of Connection Capital, please contact Steve Wilson.