Hammerson completes largest London purchase

Published 04th Aug 2010

Hammerson this morning confirmed the purchase of a prime office building in the City of London for £175m.

As revealed in Property Week (16.07.10), Hammerson has set up a joint venture with the Canada Pension Plan Investment Board buy the long leasehold interest in 10 Gresham Street for £175m, plus £8m of acquisition costs.

Hammerson will have a 30% interest in the joint venture and will manage the asset on its behalf. Its total commitment is £55m.

The vendor was Union Investment, which bought the building in 2009 from Standard Life for £141.5m on behalf of its open-ended real estate fund UniImmo: Europa. “This sale allows us to take profits in the London property market,” explained Volker Noack, a member of the management team at Union Investment Real Estate.

The 260,000 sq ft, 10 Gresham Street building was designed by Foster + Partners and completed in 2003. The principal occupier is Lloyds TSB Bank, with the remainder let to seven other tenants, including Milbank Tweed Hadley & McCloy and JC Flowers.

The annual rental income is £10.7m and the average headline rents is £44/sq ft. The average unexpired lease term is around 11 years.

Hammerson chief executive, David Atkins, said: “Given the existing lease profile and relatively low rental base this offers an excellent opportunity for us to increase value by using our asset management skills”.

Source: ' Property Week '

View All Latest News