Hammerson has completed the sale of a 75% interest in the Bishops Square office complex in London to the Oman Investment Fund (OIF), an investment arm of the Government of Oman.
Hammerson has completed the sale of a 75% interest in the Bishops Square office complex in London to the Oman Investment Fund (OIF), an investment arm of the Government of Oman.
Bishops Square will now be held in a 75:25 joint venture between the fund and Hammerson. The UK real estate investment trust (REIT) said the selling price was £445 mln (EUR 509 mln) and that the joint venture assumed the secured debt facility.
The book value of the property at end- December 2008 was £486 mln. Hammerson said the transaction would reduce the company's net debt by £386 mln and its adjusted net assets per share by 6 pence.
Bishops Square was developed by Hammerson in partnership with the Corporation of London and completed in 2005. The 71,900 m2 of office space was listed as number 1 in Hammerson's ranking of the top 10 properties in its portfolio but it has been on the market for some time.
The building is let to international law firm, Allen & Overy, under leases expiring in 2030, with tenant's break options in 2027. There is a further 4,600 m2 of retail space let to a range of tenants. Net passing rents at end-December 2008 were £34.5 mln per annum.
Commenting on the deal, Hammerson CEO John Richards, said: 'Our recently announced property disposals together with the earlier rights issue will reduce the group's net debt by around £1.2 bn. Following completion of these asset sales, net debt will be approximately £2.1 bn. This gives a pro-forma loan-to-value ratio of less than 40%, based on the portfolio valuation at 31 December 2008, ensuring we are well placed for the future.'
Earlier this week, Hammerson announced the sale of Les Trois Quartiers, a retail and office asset in Paris, for EUR 210 mln to private equity real estate investment group MGPA.
