UK REIT British Land has agreed to purchase Wardrobe Court, EC4, a 71,000-sq ft (6,600-m2) residential investment property in the heart of the City of London for £57 mn (EUR 63 mln), representing a net initial yield of 4.7%.

Situated a few minutes walk from St Paul's Cathedral, Wardrobe Court is a Grade II listed cluster of buildings comprising 92 studio, one, two and three-bedroom serviced apartments along with a retail and office unit. The majority of the property is let to BridgeStreet, a leading serviced apartment operator, until December 2014 with rent subject to annual uplifts in line with RPI.

The company is 'confident it can either attract a higher rent from a serviced apartment operator or upgrade and sell as private residential at a significant premium to our entry price', said Tim Roberts, head of Offices at British Land.

British Land has a long history of owning, managing and financing residential property and over the past two years, it has been progressively increasing its exposure to Central London. 'With the purchase of Wardrobe Court, our exposure to high-end residential properties in Central London now stands at over £250 mln,' the company said.

British Land has pre-sold £89 mln of its residential developments over the past year, including 70% of the luxury residential apartments it is developing as part of the NEQ development at Regent's Place.

CB Richard Ellis acted for the vendor.