easyHotel, the owner, developer and operator of super budget branded hotels, announces that it has pre-let all of the self-contained office accommodation (15,500 sq. ft) at its property at its 80 Old Street, London refurbishment project to a single tenant.
The offices have been pre-let on a ten-year FRI (fully repairing and insuring) lease at an annual rent of £59.50 per sq.ft with an upward only rent review at year five. There is an initial rent-free period. The new tenant, Knotel, is a global flexible office operator that currently manages over 3 million sq. ft of space across 200 locations spanning New York, San Francisco, Los Angeles, Sao Paolo, Berlin as well as London.
The self-contained air-conditioned offices are on the upper floors (3rd – 5th floors) of the property and include a roof terrace. The offices have a dedicated reception area for which Knotel will pay an additional rent of £29.75 per sq. ft.
The Group’s newly refurbished 89-bedroom hotel (Ground 1st and 2nd floors) is due to open in June 2019.
At the end of September 2018, the net book value of 80 Old Street was £12.9m. Since that time the Group has invested approximately £7m refurbishing the entire property. Based on preliminary advice, the Board believes that on completion of the project and reopening of its London flagship hotel, this freehold property is likely to be valued (at the current year end) at substantially more than its current book value.
Commenting, Guy Parsons, Chief Executive of easyHotel plc said:
“With the office space now let and the newly refurbished hotel on track to open in June, both ahead of plan, we continue to be very pleased with the outcome of the redevelopment programme at Old Street.
“The recent preliminary valuation of the office space alone is also very encouraging, with the incremental increase in the value of the whole site already representing an immediate return on investment for shareholders.”
Commenting, Tom Dugarin, UK General Manager of Knotel said:
“Knotel continues its rapid London expansion with 80 Old Street, taking our total UK footprint to approximately 240,000 square feet across 18 locations. Knotel meets our customers’ global workspace necessities – from high-growth startups to enterprises alike – by aligning their real estate and business needs with the flexibility of our tailored, on-demand and scalable workplace platform.”