Slaughter and May is advising Derwent London in relation to the acquisition of two West End properties and the establishment of a new joint venture with Lazari Investments.
Derwent London has exchanged contracts to acquire two properties in London’s Knowledge Quarter. The largest property being acquired is 250 Euston Road NW1 for a total consideration (inclusive of costs) of £189.9 million, by way of purchase of units in a Jersey Property Unit Trust which owns the freehold. The property is let in its entirety to University College London Hospital. The second property acquisition is of the freehold interest in 171-174 Tottenham Court Road W1 for total consideration (inclusive of costs) of £24.7 million. Both assets have longer term development potential.
Derwent London has also signed a detailed memorandum of understanding with Lazari Investments to establish a new 50:50 joint venture which is expected to acquire three leasehold properties from Lazari Investments for initial consideration of £64.4 million (inclusive of costs): 38-52, 54-60 and 66 Baker Street W1. Together with a fourth property owned by the freeholder, The Portman Estate, these buildings form a 1.0 acre island site capable of significant redevelopment. Subject to receiving planning on the larger scheme and a regear of the headlease, Derwent London will pay an additional £7.25 million of deferred consideration. There is the potential to obtain vacant possession at the end of 2024 which gives the joint venture an opportunity to commence on site just before completion of Derwent London’s 19-35 Baker Street project opposite.
Paul Williams, Chief Executive, Derwent London said, “These are exciting acquisitions in a strong market. We are further investing in central London’s Knowledge Quarter with potential Life Science opportunities and extending our development pipeline. We are confident that combining our skills with our strong long-term relationships with Lazari Investments, UCLH and The Portman Estate will ensure these growing West End areas continue to benefit from the provision of best in class, high quality and sustainable business accommodation.”