Greycoat has completed the acquisition of 120 Aldersgate Street, in Clerkenwell EC1, from Legal & General.
Market sources said Greycoat has paid around £23 million, which reflects a net initial yield in excess of 10% and a capital value of sub-£500 per square feet.
The property comprises 45,089 square feet of office and ancillary accommodation arranged over ground and eight upper floors, 75% of which have been recently refurbished and have EPC ratings of A or B. The property is multilet to four tenants with two vacant floors.
In a LinkedIn post, Greycoat confirmed the acquisition saying it underlined the company's "continued belief in the central London market and its enduring appeal to occupiers of all sizes". It added: "We have exciting plans [...] watch this space."
RX London advised L&G while Fineman Ross acts for Greycoat.
Greycoat, which is acquisitive at present, is understood to have ended separate talks to buy 77 Kingsway, but remains in discussions to buy 55 Strand and 140 Leadenhall Street. Knight Frank is advising Aviva Investors on the sale of the 45,000-square-foot 140 Leadenhall Street seeking £29.7 million or an 5.61% net initial yield.
The City office investment market has been slow so far this year.
According to Savills' latest City Investment Watch, April was another quiet month, with £166.8 million transacting across six deals. It said the year-to-date turnover at the end of April stood at £474.3 million across 25 deals, 77% down on this time last year . It is also 79% down on the five-year average and follows the lowest first-quarter turnover since 1996. As at the end of April, Savills was tracking £303.6 million under offer across 13 deals in the City.