Life Science REIT pays £77m for newly-built London lab space

[Image: Julia Koblitz/Unsplash]

Fresh from its £350 million IPO last month, Life Science REIT, which is focused on UK life science properties, has completed its first major deal: the acquisition of the Rolling Stock Yard office and laboratory building near London’s St Pancras station.

The company bought the asset from a joint venture of Newmark Properties, Argo Real Estate and Investec Bank for £77 million in cash and said the deal shows a net initial yield of 4.4%.

Life Science REIT joined the AIM market of the London Stock Exchange on 19 November, having raised £350 million from its IPO. The Rolling Stock Yard acquisition, which was under exclusivity at the time of the IPO, was achieved through the purchase of Deepdale Investment Holdings, the sole asset of which is the freehold interest in the asset.

The nine-storey Rolling Stock Yard, which comprises more than 50,000 sq ft (4,645 sq m) of office and laboratory space, is located on York Way north of King’s Cross and St Pancras stations. The building was completed in March 2020 and meets Life Science REIT’s sustainability objectives with a BREEAM Excellent rating and an EPC rating of A.

The building, which currently generates annual rent of £3.48 million, is 76% occupied and tenants include life science companies such as Gyroscope Therapeutics. There is also a rental guarantee on the vacant space. The weighted average unexpired lease term (WAULT) is seven years.

“Rolling Stock Yard offers attractive current income but importantly also includes significant asset management opportunities including the creation of further laboratory space to drive additional rental income growth,” said Simon Farnsworth, managing director of Ironstone Asset Management, Life Science REIT’s investment advisor.

Savills acted on behalf of Life Science REIT and BH2 acted for the vendors.