Great Portland Estates plc ("GPE") announces that it has agreed to sell Bond Street House, 15/16 New Bond Street, W1 to an Institutional Luxemburg Sicav Fund ("the Sicav") for total consideration of up to £45.0 million, representing an initial yield of 5.8% and approximately 4% ahead of the 31 March 2009 book value.
The Sicav's investment advisor is the Munich based iii-investments, the Real Estate Investment Company (KAG) of HypoVereinsbank.
GPE also confirms Great Capital Partnership, its 50:50 joint venture with Liberty International subsidiary Capital & Counties has sold 29/35 Great Portland Street, W1 to a private buyer for £7.0 million, an initial yield of 6.8% and in line with the 31 March 2009 book value.
Bond Street House is held on a lease from the Pollen Estate for a further 116 years at a fixed head rent of £0.5 million per annum until September 2009 after which it increases to 25% of the net rents received. It comprises three retail units (two on Bond Street and one on Clifford Street) and four floors of offices. The Bond Street retail is let at rents of £460 - £550 per sq. ft. Zone A and is considered reversionary, with an outstanding rent review dated April 2009 on the principal retail unit, let to Mappin & Webb. The office space above was refurbished by GPE in 2006 and let at rents of between £40 and £85 per sq. ft. The current net rent, having deducted headrent is £2.4 million per annum.
The Sicav will pay GPE initial consideration of £40.0 million, and up to a maximum further £5.0 million based on the April 2009 rent review settlement. GPE will retain control of the review and the full £5.0 million will become payable provided the settlement is broadly in line with its external valuers 31 March 2009 rental value. The payment to GPE will be reduced on a straight line basis below this.
"These sales are in line with our disciplined approach to recycling capital from mature assets as we can put the money, in today's opportune market, to better use elsewhere."
