22-storey Aldgate tower hits the market for £100m

By James Buckley - Tuesday, July 11, 2017 15:39

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Angelo Gordon has today put up for sale the Relay Building, a landmark 22-storey tower in Aldgate, for £100m, CoStar News can reveal.

The US private equity group has instructed Eastdil Secured and Allsop to sell the 105,996 sq ft building at the corner of Commercial Street and Whitechapel High Street for a net initial yield of 5.4% and a capital value of £945 per sq ft.

At ground floor level there is a retail frontage to Whitechapel High Street and Commercial Street, arranged as three retail units trading as Tesco, Pret a Manger and Paddy Power. The building is multi-let to four office tenants providing an AWULT of 13.1 years or 10.2 years to the lease breaks.

The Relay Building produces a current passing rent of £5.507m per annum, equating to a rent of £51.96 per sq ft overall.

Shares in AG Commercial St. I B.V., the investment company which holds the majority freehold interest in the property, is being offered for sale.

Based on indicative financing proposals which Eastdil has already received from the debt capital markets, a levered cash on cash of between 8.0% - 9.0% is achievable.

The property is fully let, except the sixth floor which is guaranteed by rental top up. This, being the top office floor, offers the potential to command the highest rents in the building. An incoming investor can capitalise on reversion in both the office and retail space. The retail leases are more historic than the office space and are therefore the most reversionary in the building with rent reviews from October 2018.

The Relay Building, which also includes 207 residential flats, reached practical completion in 2014.

jbuckley@costar.co.uk

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