Deka and GPE agree €450m office trade in London

German fund manager Deka Immobilien and UK-listed Great Portland Estates have agreed to exchange two properties in London in transactions totalling €450 mln.

In the first transaction, GPE is selling an office building at 33 Margaret Street in London to Deka-Immobilien Europa fund. The investment volume of £216 mln (€292 mln) reflects £2,085 per square foot and a net initial yield of 3.3%.

The building, part freehold and part leasehold, comprises 103,700 square foot (9,635 m2) of predominately office space, and was developed by GPE in December 2012.

The offices were fully let to international property adviser Savills for 20 years at a rent of £7 mln per annum. Including two retail units fronting Regent Street, the building offers a total net rent of £7.5 mln. The sale price reflects a small premium to the September 2015 valuation.

In the second transaction, GPE is acquiring 50 Finsbury Square in London from the Deka-Immobilien Global fund for £119 mln (€160 mln), reflecting £941 per square foot and a net initial yield of 5.32% after costs.

50 Finsbury Square is a freehold property and comprises 126,500 square foot of predominately office space, developed in 2000. The offices are fully let to Bloomberg until June 2020 at £5.6 mln per annum. Including four retail units fronting Finsbury Pavement, the total annual rent is £6.6 mln.

Toby Courtauld, chief executive of GPE, said, 'The sale of 33 Margaret Street is the culmination of six years' of work by the team at GPE, which has seen the property acquired, consented, built, leased and now sold crystallising a healthy internal rate of return.

'50 Finsbury Square is, by contrast, an asset that will benefit significantly from GPE's repositioning once Bloomberg vacate, as expected. In addition, the exciting transformation of this area resulting from Crossrail, and the continued growth in the Creative/TMT sector, will provide a further catalyst for growth,' he added.