The London School of Economics is buying the freehold interest in Centrium, 61 Aldwych, WC2, from Chinese investor COLI for £170 million for its own occupation.
The transaction for the 180,000-square-foot office and retail block reflects a capital value of £944 per square foot. The building is principally vacant with some short-term lettings on the top floors.
The building is in Aldwych between the City and West End markets and close to Holborn and Temple stations. LSE's main campus is a stone's throw away on Houghton Street.
Famous students include Rachel Reeves, the current Chancellor of the Exchequer, Pierre Trudeau, the former Prime Minister of Canada, and Mick Jagger, the lead singer of the Rolling Stones.
Savills reports that the transaction reflects a "recurring trend of office occupiers opting to purchase their own building at a time when Grade A Central London rents are rising and capital values are at a discount to historical pricing".
Other recent examples include: US bank State Street's acquisition of Helical and Orion Capital Managers' 100 New Bridge Street for £333 million, as revealed by CoStar News; US tech billionaire's acquisition of 11-12 St James's Square in the West End for £162 million; JD Property Group, the real estate arm of Chinese ecommerce giant JD.com, and its acquisition of 20 Greycoat Place, a 24,000-square-foot office in London's Victoria for £37 million; and VakifBank, the second largest bank in Turkey, and its acquisition of Asia House, 31-33 Lime Street,
China Overseas Holdings bought the freehold interest in the Centrium building from GLL Real Estate Partners in 2013 for £170 million, reflecting a net initial yield of 5.2%.
Newmark advised COLI.