With the Government’s commitment to build High Speed 2 creating a catalyst for the redevelopment of Euston Station, the Euston Estate is a major strategic site at the heart of London’s future infrastructure development programme. We provide a complete property and asset management service across the whole estate.
Securing income profile of portfolio
Network Rail had decided to vacate One Euston Square and served notice in July 2011. As the sole occupier of this 115,000 sq ft building, this left a significant hole in the income profile of the portfolio. The loan secured on the portfolio is due to mature during 2013 and we needed to ensure the income profile was secure in order to help Sydney & London benefit from a more competitive rate of finance, particularly given the challenging debt refinance market.
Our building consultancy team handled the dilapidations claim on behalf of Sydney & London, agreeing a settlement which was paid in cash prior to Network Rail vacating in July 2012. By agreeing a settlement paid in cash, rather than a reinstatement, it was possible to fund the redesign and remodelling of the building.
Enhancing income through major remodelling
We identified that enhanced income could be created by applying for a change of use on the ground floor to retail and secured planning consent. We then remodelled the reception and upgraded the building’s M&E to provide for the requirements of the modern office occupier. This completed a successful repositioning of the building as a modern multi-tenanted central London office with a compelling ground floor retail offering.
Our central London agency teams provided advice on the refurbishment specification as part of our letting strategy and we project managed the refurbishment, which commenced in August 2012.
Meanwhile we began pre-marketing the office space and secured 47,000 sq ft of pre-lets to The Office Group, UCL and High Speed 1.
80% let, maintaining rent roll
Since we completed the refurbishment, we have let a further 19,500 sq ft let to Paddy Power and Guinness Trust Housing Association with another 19,500 sq ft currently under offer. Meanwhile, our London retail agency team sub-let the retail space to the freeholder Network Rail, and turnover rents were agreed with Oliver Bonas and All Bar One. This will leave One Euston Square 80% let, maintaining its rent roll and facilitating its refinancing later in 2013.
Outcomes achieved by LSH:
- 91,500 sq ft let in 6 months in 7 separate transactions (51% pre let)
- Significant dilapidations claim and refurbishment programme managed
- Market repositioning to modern multi-tenanted central London office
- Enhanced income created from change of use of ground floor to retail
LSH an ideal advisor for Sydney & London
Richard Anning, Chief Executive of Sydney & London, commented: “LSH is an ideal advisor for a complex property situation like the Euston Estate. They went above and beyond to ensure the income from our property portfolio did not plummet – bringing innovative ideas and solutions to the table that have delivered excellent results already. The strategy is to continue to manage and deliver asset value and the results to date have exceeded our expectations. Credit has to go to the LSH team for achieving this outcome.”