Capital House, 85 King William Street, EC4

Sale of a 122,000 sq ft, freehold, multi-let prime City asset near the Bank of England on behalf of Barings.

The property benefits from a highly prominent location in immediate proximity to Bank Underground Station and within the heart of the City of London.

Having acquired the asset in 2021, Barings completed an asset management programme, investing over £11 million. This included the refurbishment of the ground-floor reception, installation of end-of-journey facilities including 101 bike racks, introducing terraces, and the refurbishment of six office floors. At the point of sale, the scheme was let to seven tenants over 11 leases, with office occupiers including Rothschild and Redburn, which is part of Rothschild & Co. The property produced a total annual rent of £8.54 million, reflecting a highly reversionary £70.29 per sq ft overall.

As part of the refurbishment, Barings achieved an EPC B on the refurbished floors with a target of BREEAM Excellent accreditation, pending verification. The development also features a WiredScore Platinum certification.

The property was sold to Daibiru, a Japanese investor and subsidiary of Mitsui OSK Lines. The transaction will see Daibiru’s ultimate parent, Japanese shipping group Mitsui OSK Lines, operate its London headquarters from the building, moving from Thomas More Square.

Barings originally paid £130.5 million for the asset in 2021 (RX London advised on the acquisition). RX London sold the property for Barings at a price of £169.0 million, reflecting a net initial yield of 4.96% and a capital value of £1,400 per sq ft, thus crystallising a significant profit for the global real estate investment manager.