Landsec has confirmed the purchase of 55 Old Broad Street in the City of London EC2, from PGIM Real Estate. The deal was finalised for a gross price of £87m, delivering a net initial yield of 4.1%, which is expected to increase to 5.8%.

55 Old Broad Street is a 10-storey 100,000 square feet building, which adjoins Landsec’s Dashwood City office tower.

The building's occupiers include Ecom Agrotrade, GB Rail Freight, and Barclays, making up 87% of the building's rental income.

Nick de Mestre, Head of Investment, Landsec, commented: “55 Old Broad Street is a well-located asset in the heart of London. The development potential of this asset, combined with the potential for Dashwood, offers Landsec the opportunity to deliver a compelling, best-in-class destination over the medium term. This acquisition demonstrates our commitment to optimising our central London portfolio through the reinvestment of capital, as set out in our strategy.”

Charles Crowe, Head of UK Transactions at PGIM Real Estate, added: “I am pleased with the significant value we were able to create through our ownership of 55 Old Broad Street and its successful sale. PGIM Real Estate had reached the end of its business plan by achieving leasing stabilization post refurbishment and engineering a block date in 2024, that will enable a larger re-development of the site. The sale crystallizes a strong return since purchase in 2012.”

Knight Frank represented Landsec. Squarebrook and JLL represented PGIM Real Estate.