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London & Stamford Property has exchanged contracts with UBS Triton Property Fund to acquire the One Carter Lane office complex in the City of London for £75 mln (EUR 85 mln), excluding costs.

The property occupies a prominent island site to the south of St Paul's Cathedral. It is long leasehold with a further 136 years unexpired and comprises 125,844 sq ft (11,700 m2) of offices and 6,810 sq ft of retail accommodation.

The current net income is £5.8 mln per annum, 97% of which is from Goldman Sachs International expiring in 2018. The Goldman lease has a tenant break clause in March 2013.

The transaction reflects a net initial yield of 7.33% and, initially, will be financed out of existing cash resources. Leverage may be sought following completion to enhance the cash yield further.

'Central London continues to show signs of economic growth and we are delighted to have acquired this prime, City of London property producing a relatively high net initial yield reflective of the nature of the investment,' said Raymond Mould, chairman of London & Stamford Property. 'The transaction also represents an excellent asset management and/or refurbishment opportunity at a time when there is forecast to be a shortage of good quality buildings during a period of strong rental growth in the City.'

Strutt & Parker acted for L&S and King Sturge acted for UBS.