UK investor Picton has agreed to sell its second largest office asset, Angel Gate, London, EC1 for £29.6 mln (€35 mln), to investor QSquare.
The cash transaction is set to complete on 9 April.
Picton said that the disposal was in line with its strategy to repurpose appropriate office assets and follows the firm securing residential planning consents during 2023 and a subsequent structured marketing process this year.
Michael Morris, chief executive at Picton, commented: 'The team has done an excellent job at Angel Gate.
'This sale marks the culmination of a complex process to maximise value from a partially vacant office asset by securing residential planning in a Zone 1 London location.
'The transaction reduces our office exposure and the sale price supports its December 2023 valuation.'
The sale consideration is 5% ahead of the 31 December 2023 valuation of £28.1 mln. Currently the property is approximately 50% occupied and represents the company’s largest single void, with an annual net rental income of £0.7 miln.
Following completion of the transaction, Picton’s office exposure will reduce from 30% to 28% and portfolio occupancy will increase from 90% to 91%.
The company intends to use part of the proceeds to repay its revolving credit facility of £16.4 mln, currently costing 6.8% per annum.
Following this repayment, based on the 31 December 2023 valuation of Picton’s property portfolio, the company’s proforma LTV will reduce from 28% to 25% and the weighted average interest rate will reduce from 3.9% to 3.7%.
The average maturity of the debt will also increase to eight years with 100% of the drawn debt fixed.
The company will consider options for the remaining proceeds of £13.2 mln following completion of the disposal, dependent upon prevailing market conditions and investment opportunities.
