Property continues to lure investors as BoI buys London office block

THE lure of property as an investment has shown no signs of abating, with private clients of Bank of Ireland buying a major office block in London.

Thu, 09 Dec, 2004 - 00:00

Ian Guider

The bank said yesterday that it spent €158 million on Windsor House, an office in Victoria in the West End of London, and the nearby Christchurch House.

Windsor House is an 18-storey office tower totalling 112,685 sq ft, and Christchurch House, a retail and office property totalling 33,600 sq ft.

Windsor House accounts for 78% of the rental income and has undergone a refurbishment in recent months, the building is let to London Underground on a 20-year lease with no break options. Christchurch House, is let to mainly Lloyds TSB Bank with some other retail tenants.

This is the third swoop by Bank of Ireland’s private clients arm on property abroad in recent months.

In August it bought an office block in Brussels for €71 million and two months later acquired Gallions Reach Shopping Park for €116 million.

BoI Private bank director Peter Collins said that fears of a decline in property yields in London have diminished and the city is now showing signs of recovery in the office market.

“The West End, in particular, is beginning to experience rental growth, specifically for Grade A space,” he said. “In this respect it is the first of the major London sub-markets in which we are seeing this trend emerge. Victoria is a prime business district in the West End of London that has traditionally attracted large space users including financial institutions, multi-national corporate and Government departments.”

The bank said vacancy rates in area are below the West End average at just over 7% and the current rental rate of £55 per sq ft is £10 below were it was three years ago.

Mr Collins added there was strong demand from wealthy investors to pump money into the property market. “In this most recent deal, we saw continued interest from our clients both in terms of direct investment and, in particular, through pension-based investments.”