Welby House, 96 Wilton Road, London, SW1V 1DW
Project Overview
The building was purchased by the current owners in 2017 for £7.25m, and we can secure this now
for c £5.3m.
They bought the building when it was fully let, with a view to converting it to residential, vacated all
the tenants and then decided against the strategy and started re-letting half way through COVID, so
a very bad strategy all in all, which resulted in agreeing lets below the market level.
The building has current income of £186380 PA (tenancy schedule below – let to multiple tenants),
but this is well below market value as the market rent should be c £50 / ft, there are offices in the
building opposite of comparable size, letting for £55/ft +. This income is low as the first floor (largest
floor plate in the building) and the front half of the lower ground floor are vacant.
The net lettable area of the building is 7,788 SQFT. So if we apply £50/ft, the building is capable of
producing c £428,340 PA on long lets. Please note there needs to be adjustments for the lower
ground space.
The current income is a yield of 3.5% against a purchase price of £5,300,000 (excluding purchasers
costs), and capable of producing a much higher yield, therefore increasing the value of the building
over time.
Once the vacant floors are re-let at market rate, this will produce an income of 6% (excluding
purchasers costs).
Once the building is re let and producing a strong income, we anticipate the building will be worth c
£7.8m, based on a yield of 4.75%. This will produce a profit of just under £1m. There is further value
to be established by re-letting the currently occupied floors over the next 2 to 3 years as these have
been let below market value.
The building is freehold, has a lift, AC, bike store, communal shower and is generally in very good
condition, so very little capital is required to be spent.
A key point here is that 2 floors of the office have been let to Veolia, which is a very large company.
They have a balance sheet of over £800,000,000 meaning there is a very strong tenant in situ
occupying a large amount of space within the building. This will help significantly when re-selling the
building as prospective purchasers will view the income as being very safe.
Pictures: