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Trocadero rescued by Burford for pounds 94m: Office space will be converted to leisure use

BURFORD, the fast-growing property company, confirmed yesterday that it had bought the Trocadero leisure complex out of receivership for pounds 94m, writes Tom Stevenson.

Burford is understood to have fought off rival bids from British Land and Chelsfield for the 411,000 square foot site in the heart of London's West End. Previous owners include Brent Walker and Ireland's Power Corporation.

Burford, which has spent more than pounds 300m on properties over the past 18 months, is to fund the purchase out of its banking facilities, doubling gearing to 75 per cent.

Nick Leslau, chief executive, said Burford could spend a further pounds 55m while still remaining under the company's self-imposed ceiling of 100 per cent gearing.

He said the acquisition of the Trocadero would increase the proportion of Burford's portfolio represented by properties requiring intensive management attention, an area where the company has a reputation for adding value.

Initially Burford will receive rent of pounds 8.6m, a yield of 9 per cent, but the attraction of the site is the potential to increase the spend of the 14 million people who pass through the building every year.

It is expected that office space of 115,000 square feet will be converted to leisure use in a bid to increase the property's rental income. More than a quarter of the space is vacant.

At the peak of the property market boom, the Trocadero was valued at more than pounds 200m, but it was hit hard in the recession.