Hammerson swoops on Leadenhall

Property development group Hammerson has agreed the £65m purchase of the long leasehold interest in Leadenhall Court, a City of London office building, from Ernst & Young, the receivers handling the White Tower CMBS portfolio.

Leadenhall Court provides 109,000 sq ft of prime City office space at the corner of Gracechurch St and Leadenhall St, between the Bank and Liverpool Street stations. It was built in 1988.

The building is fully let until March 2014, Hammerson notes, to a subsidiary of RSA Insurance Group. Passing rents are £7.16m per annum after payment of head rent to the City of London Corporation, reflecting an initial yield of 11%.

“There is a wide range of opportunities to add value to the property, including the potential for refurbishment or full redevelopment of the property,” the group added.

David Atkins, Hammerson’s chief executive, said: “This acquisition is in line with our strategy to take advantage of attractive opportunities offered by current market conditions. The building will allow us to use our asset management skills to create value while offering a high initial yield and an immediate positive contribution to earnings.”

Hammerson was advised by Strutt & Parker. CB Richard Ellis and Knight Frank acted on behalf of Ernst & Young.