Indian real estate developer Indiabulls has bought one of the most iconic buildings in London's Mayfair for £155 mln (€193 mln).

Indian real estate developer Indiabulls has bought one of the most iconic buildings in London's Mayfair for £155 mln (€193 mln).

22 Hanover Square has been purchased from Scottish Widows Investment Partnership (SWIP), now part of Aberdeen Asset Management, which put the 87,444 sq ft (8,123 m2) building up for sale in April through H2SO.

'Hanover Square will become arguably London's 'best connected' square when the new Bond Street Crossrail station opens in 2018. The building has huge potential for redevelopment,' commented Sameer Gehlaut, chairman of Indiabulls Group.

H2SO’s John Olney added: 'Freehold assets of this quality and scale are rare in Mayfair, and there was a very high level of investor interest in the building.'

Four parties were selected from the first round of bidding to participate in the final round. 'Indiabulls Real Estate emerged as the highest bidder in a closely contested bid process,' said Olney.

Indiabulls Real Estate is part of Indiabulls Group, an Indian real estate developer with projects spread across high-end offices, commercial complexes and premium residential developments with over 24 million sq ft of projects under construction.

H2SO - which has recently become part of Colliers International - advised SWIP on the sale.

Indiabulls has long been active in the UK property market where it bought a stake in local property builder, Dev Property Development, in 2008.

SWIP is also looking for a buyer for 11 Hanover Square which is being offered at a guide price of over £130 mln (€160 mln).

SWIP has hired H2SO to market the entire asset which is let to property adviser JLL at a current rent of £5.5 mln per annum. JLL’s lease on the 8,120 m2 building runs until 2017 at a current rent of £62.90 per sq ft which is well below the prevailing level for equivalent space in Mayfair.

The building is also expected to benefit from the scheduled opening of Crossrail in 2018.

A sale of the building at £130 mln would reflect a net initial yield of 4% and a reversionary yield of 5.1% allowing for standard purchaser’s costs of 5.8%.