A 75,000 sq ft prime office building in Birmingham CBD acquired was acquired by SevenCapital in 2006. The building was let on a short 6-year lease to international law firm Hammonds (now Squire Sanders LLP) who were paying a rent based on £17 per sq ft.
At the time of acquisition, this 1980’s office building was in need of major refurbishment with significant levels of obsolescence causing operational issues for the occupier. Negotiations were undertaken with the occupier to restructure their occupational interest in exchange for the provision of a new and modern building more suited to their occupational requirements.
A new agreement for lease was signed providing an unbroken 16-year income stream based on the new rent of £23.75 per sq ft. Following an extensive refurbishment, delivered on budget, the resultant investment sold to Aviva Investor Pensions Ltd for £27.0m reflecting a yield of 6.09%.
