UK - F&C REIT Asset Management and AREA Property Partners have sold one of the top assets from the Dawnay Day portfolio they acquired in March to the BP pension fund and Great Portland Estates (GPE).

F&C REIT and AREA acquired the £600m (€676m) real estate portfolio from Dawnay Day after the group went into administration, which included the Austin Reed store on London's Regent Street (See earlier IPE Real Estate story: Dawnay Day properties bought by institutional investors)

The BP pension fund and GPE have acquired the retail unit through its Great Ropemaker Partnership joint venture for £27m, reflecting an initial yield of 7.2% - a joint venture set up in 2008 to enable both parties to invest in central London real estate together.

The 55,369 square foot store at 103/113 Regent Street is let in its entirety to clothes retailer Austin Reed until 2027, while the head lease from The Crown Estate will expire in 2079, and carries five-yearly head rent reviews to 28% of estimated rental value (ERV).

After the ground rent deduction, the net rent is £2.055m per annum, with both the head lease and occupational lease subject to rent review in April 2010.

Toby Courauld, chief executive at GPE, said: "At the Austin Reed store, we have acquired a prime asset giving us a variety of opportunities to enhance value through, for example, lease re-structuring, reconfiguration and in the longer-term, potentially wholesale redevelopment.

"We look forward to working with both The Crown Estate and Austin Reed to unlock the latent potential in this first class location," added Courauld.

GPE has also purchased the nearby Kingsland House offices at 122/124 Regent Street though a separate joint venture with Capital and Counties, a subsidiary of Liberty International.

The building was also sold by F&C REIT for £8m, reflecting a net initial yield of 5%.

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