LONDON: Life Science REIT (AIM: LABS), the real estate investment trust focused on UK life science properties, announced that, on 6 May 2022, it completed the acquisition of 7-11 Herbrand Street, an iconic Art Deco building close to University College Hospital and University College London in London’s Knowledge Quarter, the area that includes Bloomsbury, King’s Cross and St Pancras.
The purchase price of £85.0 million, excluding acquisition costs, was satisfied entirely in cash and reflects a net initial yield of 4.42% based on the underlying net passing rent of £59.85 per square foot. The entire building is currently let to Thought Machine, one of the UK’s leading fintech companies, until October 2026.
The property, which currently comprises Grade A office space, totals a net internal area of 67,097 square feet on four floors with a partial basement, and represents an ideal opportunity for development as a major life science asset.
It is situated in close proximity to a number of major academic institutions, healthcare organisations and innovative companies including University College London, University College Hospital, the Francis Crick Institute and the Oriel project (a future world leading eye hospital, research and education centre due to open in 2026). The property is well-located for access to Euston, King’s Cross, St Pancras and Tottenham Court Road transport hubs with Russell Square tube station just 100 metres away.
Life Science REIT, with support from key advisers, has undertaken a feasibility study to determine the suitability for lab conversion. The study confirmed that the building has great potential and benefits from large floor to ceiling heights, structural slab and large, column-free floor plates.
Life Science REIT has now deployed more than £262 million of total capital since its IPO, representing c. 75% of the net proceeds raised at IPO.
Simon Farnsworth, Managing Director of Ironstone Asset Management Ltd, the Company’s Investment Adviser, said: “We are delighted to have secured such a major acquisition for the Company in London’s Knowledge Quarter. The important location and prominent size of the asset, along with attractive physical characteristics such as a large floor to ceiling height, represent outstanding potential for conversion into a leading long-term life science property.
“The transaction represents further progress in the deployment of our IPO proceeds, which are now approximately 75% invested and I am pleased to report that the Company’s near-term acquisition pipeline remains extremely attractive.”
Life Science REIT plc is a property business focused solely on the UK’s growing life science sector, specifically targeting opportunities in the “Golden Triangle” research and development hubs of Oxford, Cambridge and London St Pancras. The Company’s intention is to become the property provider of choice for life science companies in the UK, whilst enabling shareholders to gain exposure to a specific growth sector.
The objective of the Company’s investment policy is focused on capital growth, whilst also providing a growing level of income, by investing primarily in a diversified portfolio of properties that are leased, or intended to be leased, to tenants operating in the life science sector in the UK.
Life Science REIT joined the AIM market of the London Stock Exchange on 19 November 2021, having raised £350 million in its IPO. Its shares trade under the ticker LABS.