Israeli insurance and finance group Harel has sold a trophy office asset in London, leased to the UK government, to a high net worth private client of Investra Capital.
Financial details were not disclosed but Savills, advisers to Harel, said that the price reflected a net initial yield of 3.75%.
The office, dubbed 50 Broadway SW1, is located within walking distance of Victoria Station and the Houses of Parliament.
Itzik Tawil, head of global real estate and credit at Harel Group, said: 'We are pleased with this successful transaction, which is a great achievement for Harel in a time of challenging, volatile markets and a high interest rate environment.
'It is Harel’s long term strategy to invest in diverse real estate properties over different sectors and strategically located in major urban centers across the globe, in order to optimize our Life & Savings portfolios returns for our clients.'
Harel, and development partner, Valeo Capital, undertook a refurbishment of 50 Broadway to create 72,560 ft2 of high quality office accommodation arranged over lower ground, ground and nine upper floors.
The property was pre-let in its entirety to the UK government for a term of 20 years (from June 2021) subject to a tenant break option on the 15th anniversary of the term.
Said Stephen Down, chairman of Savills Central London Investment: 'Against a backdrop of substantial market volatility, the sale of 50 Broadway demonstrates the resilience of global investor demand for top quality office accommodation in established locations, particularly when coupled with the scarcity of 18.5 years of undoubted UK government income.'
Matthew Doyle of Valeo Capital added: 'We are delighted to have worked together with Harel on the repositioning, letting and sale of 50 Broadway. The transaction demonstrates continued investor demand for prime office assets despite the economic backdrop.'
International law firm Taylor Wessing advised Harel on the sale. The firm's real estate partner Keith Barnett said: 'We have worked with Harel on this project since the very beginning and are very pleased to have seen this progress from success to success. We look forward to working with Harel together again as the company continues to optimise its portfolio for clients.'
