Landsec has sold One New Street Square in London, EC4, to Hong Kong-based property developer Chinachem Group for £349.5m – below the building’s September 2022 valuation of £362.8m.
Landsec said the sale price reflects a total return on capital averaging 10% per annum since the developer bought the site in June 2005 and redeveloped it in 2016.
The 276,502 sq ft building is fully let to Deloitte with a 14-year unexpired lease term remaining and a current annual net rent of £16.8m. The developer said it sold the building as there were ‘limited opportunities to add further value’ and the disposal was in line with Landsec’s strategy to ‘recycle capital out of mature London offices’.
It added it would use the proceeds to repay debt and reduce its LTV from 31.1% to 28.9% based on September 2022 valuations.
Marcus Geddes, managing director, central London at Landsec, said: “One New Street Square is a premium 276,502 sq ft London BREEAM Outstanding office development, which was completed in 2016 and fully let to Deloitte during construction on a 20-year lease. This represents a clear demonstration of our strategy in action and our strong customer relationships.
“Through this sale we have been able to unlock capital at a rate that has provided strong returns over our 18 years of ownership. Crystallising these returns enables us to turn towards future opportunities and future growth through balance sheet strength and flexibility.”
Donald Choi, executive director and CEO of Chinachem Group, added: “We’re delighted to have acquired One New Street Square successfully as it is located in the strategic central London area with best-in-class building specifications and attractive returns. This is an important step forward for the group and we intend to hold this property for long-term investment.
“While Hong Kong will remain our home and core market, we intend to incrementally increase the group’s exposure in gateway cities of major developed markets, so as to fulfil our business diversification objectives and build a resilient, long-term income stream.”
Knight Frank advised Landsec, and Savills advised Chinachem Group.
