British Land announced today that it has sold Ropemaker Place, London EC2 to Frasia Properties S.à r.l. and Frasia Properties Subsidiary S.à r.l., which are subsidiaries of a UK Real Estate Investment Trust structure, for a gross sale price of £472 million. The purchasers are an international consortium of investors and were represented by AXA Real Estate Investment Managers. British Land will top up the rent frees to the contractual rent of £24.05 million per annum. The sale represents a net initial yield of 5.0% on the basis of an acquisition of the units in Ropemaker Place Unit Trust.
The offices are fully let on an average lease length of 14 years, with key tenants including The Bank of Tokyo-Mitsubishi UFJ, Ltd and Mitsubishi UFJ Securities International plc, Markit, Liberum Capital and Macquarie Group, at a day one contractual rent of £24.05 million per annum, rising to £27.5 million per annum on minimum uplifts at first reviews. At 30 September 2012, Ropemaker Place was valued at £455 million, with current passing rents of £0.9 million and accounting rent of £21 million.
British Land will receive net proceeds of £461 million in cash from the sale after costs, 1.4% above the September 2012 book value.
The sale is in line with our strategy of recycling capital and balancing our portfolio between the West End and the City – the West End now accounts for half our London Office portfolio (from 46%). The proceeds of the sale will be redeployed into our existing London development programme.
Tim Roberts, Head of Offices at British Land said: “Ropemaker demonstrates our track record of delivering exceptional, sustainable buildings which are profitably let to quality occupiers. The sale reflects the attractiveness of our buildings to investors as well as occupiers and allows us to recycle capital to invest in our development programme.”
Jones Lang LaSalle and SJ Berwin acted for British Land on the sale.