Feb 10 London property and investment company
Great Portland Estates said it had sold the freehold of
Rathbone Square to an entity owned by German real estate
investment trust WestInvest Gesellschaft and property assets
manager Deka Immobilien Investment for a headline price of 435
million pounds ($543 million).
The sale, which reflects a net initial yield to the buyer of
4.25 percent, will bring a whole-life capital return of about
110 million pounds to Great Portland, it said.
Great Portland, whose portfolio is dominated by office
property but also includes retail and some residential property,
said it expected to return the whole-life surplus to
shareholders as a special dividend.
The sale of Rathbone Square is expected to be broadly
neutral to EPRA earnings - a measure of the value of its
properties - for the current financial year, Great Portland
The sale price represents a discount of 4 percent to the
September 2016 valuation, adjusted for subsequent capital
The 419,700 square feet mixed-use development is currently
under construction and 242,800 square feet of office space is
pre-let to Facebook on a 15-year leases at an initial
annual rent of 17.8 million pounds.
"The pricing of the asset with an uber prime covenant of
Facebook... is disappointing at an exit yield of 4.25 percent
compared with a peak valuation of nearer 3.75 percent we
estimate," Jefferies analysts wrote in a note.
Great Portland in November cut its full-year rental growth
forecast due to the uncertainty after Britain's vote to leave
the European Union. The company, however, said last month that
it saw "healthy" interest despite economic uncertainty.
($1 = 0.7999 pounds)
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by