McKay Securities PLC McKAY FULLY PRE-LETS 30 LOMBARD STREET, EC3 (9953I)
27 March 2018 - 5:00PM
UK Regulatory
TIDMMCKS
RNS Number : 9953I
McKay Securities PLC
27 March 2018
McKAY SECURITIES PLC ("the Group" or "McKay")
McKAY FULLY PRE-LETS 30 LOMBARD STREET, EC3
McKay Securities PLC, the only UK REIT specialising exclusively
in the London and South East office and industrial markets, has
exchanged contracts to let the entirety of its 58,000 sq ft
speculative office development, Aurum, at 30 Lombard Street in the
City of London. The high quality office building has been pre-let
on a 15-year term (without breaks) to FTSE 100 wealth manager, St.
James's Place plc ("St. James's Place").
The contracted rent has been agreed at ERV with commensurate
incentives, on FRI terms with 5 yearly upward only rent reviews.
The agreement is contingent on practical completion of the building
in the summer, with St. James's Place then taking occupation in
January 2019. The letting will increase McKay's contracted rental
income by 14% and represents 10% of the portfolio ERV. It follows
continued leasing success across McKay's portfolio and unlocks 36%
of the Group's substantial reversion for the future benefit of
shareholders.
Aurum is a striking Grade A office building inspired by Lombard
Street's financial heritage and is set to enhance this
internationally recognised core City location. The building is set
across 11 floors and benefits from column free floorspace and
excellent natural light as a result of its corner location. The
substantial roof terrace overlooks the 17(th) century Wren church
opposite and other iconic city buildings. The scheme is one of a
very limited number of medium sized new office developments set for
completion in the City core during 2018, with this shortage
contributing to the decision by St. James's Place to commit
early.
McKay acquired the long leasehold interest of the site in 1999
with a 36,000 sq ft 1960's office building generating a rental
income of GBP1.12m pa and a planning consent in place for 53,500 sq
ft. Income was retained from the building while an improved
planning consent was achieved for the current scheme, securing a
62% increase in lettable area. Capital investment and the decision
to speculatively redevelop the property in 2015 was unlocked
through McKay's successful capital raising in 2014, which provided
additional financial resources to implement this unique market
opportunity.
Simon Perkins, Chief Executive of McKay, commented:
"There is something special about the history and the presence
of this internationally recognised City core location, which our
development will both complement and benefit from. We look forward
to completing this stunning City of London property for St. James's
Place, and providing them with a prominent and highly attractive
workspace for employees and clients alike.
"This isn't just a landmark letting for McKay and another boost
for the City core but a substantial vindication of the strategy we
have been pursuing since our capital raise in 2014. The 38%
reversion in our portfolio continues to be transformed into income
and we have plenty more to go for, generating further momentum for
McKay and our shareholders.
"What the Lombard Street redevelopment also highlights is the
technical and logistical complexity of providing new office
floorspace in such constrained surroundings. St. James's Place has
secured one of the few new build opportunities of this size, and
these practical, as well as financial, constraints will continue to
restrict occupier choice in the City core. What the letting also
highlights once again is the importance that must be placed on
creating the right kind of high quality space for occupiers.
Uniquely placed with our sole focus on London and the South-East,
we are acutely aware of tenant needs and will continue to create
relevant and flexible space for today's businesses."
Knight Frank and Savills acted on behalf of McKay while Doherty
Baines acted for St. James's Place.
- ENDS -
Date: 27th March 2018
For further information please
contact:
McKay Securities PLC FTI Consulting
Simon Perkins, CEO Dido Laurimore, Tom Gough, Ellie
Sweeney
Giles Salmon, CFO 020 3727 1000
01189 502333
About McKay Securities
McKay Securities PLC is a commercial property investment company
with Real Estate Investment Trust (REIT) status, listed on the main
market of the London Stock Exchange. It specialises in the
development and refurbishment of good quality office and industrial
buildings within established and proven markets of London and South
East England. The portfolio, which was valued in excess of GBP450
million in September 2017, comprises 36 properties in strong and
established areas which deliver diversity in terms of both sector
and location.
This information is provided by RNS
The company news service from the London Stock Exchange
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