20/01/2007 – Estates Gazette
Greek tycoon buys government HQ
Greek shipping tycoon Achilleas Kallakis has bought a 220,000 sq ft government headquarters building overlooking the Thames in Vauxhall, SW8, from the Reuben brothers in a £75m off-market deal.
Kallakis’s Pacific Group – the investment arm of a private family trust based in Monaco and Switzerland – completed the acquisition this week. The sale price reflects a circa 6.5% yield.
The 1975-built, 23-storey Market Towers at 1 Nine Elms Lane is principally let to the Department of Health’s Medicines & Healthcare Products Regulatory Authority for a further five years, at a rent of £4.9m pa.
A source close to the deal said the building represented a “win-win” situation for Kallakis.
“The government will no doubt renew its lease but, at the same time, it has the potential for redevelopment as residential. Kallakis has paid around £350 per sq ft, while residential values in Vauxhall are around £1,500 per sq ft.”
It is the second major government office HQ that Pacific – which owns a £1bn UK portfolio – has bought in the past 12 months. In July, Pacific bought the 20-storey Apollo House and Lunar House block in Croydon – which is let to the Immigration and Nationality Directorate – from the Tchenguiz brothers for more than £100m.