St Martins, the property arm of the Kuwait Investment Authority, has exchanged contracts with British Land to acquire the iconic Willis building in the City of London for £400mln (EUR 500mln). The sale is expected to be finalised by June.

St Martins, the property arm of the Kuwait Investment Authority, has exchanged contracts with British Land to acquire the iconic Willis building in the City of London for £400mln (EUR 500mln). The sale is expected to be finalised by June.

Designed by architect Norman Foster and developed by British Land, the Willis Building is located in the centre of the City of London district opposite the Lloyd's building. The property totals 46,000 m2 in two adjoining freehold buildings of 10 and 28 storeys, and includes four retail units.

St Martins' managing director Nigel Brown said: 'This is a tremendous addition to our London portfolio; a trophy building offering the potential for excellent long-term returns. We have an appetite for landmark buildings and this was a rare opportunity to secure one of London's finest. It also complements the assets we are seeking to acquire in the emerging markets. We anticipate that this will be the start of a very active period for us over the next two years.'

Tim Roberts, executive director British Land and head of offices, added: 'This is an exceptional building and the sale locks in attractive development profits. It also allows us to recycle capital, reduce gearing and add to our war chest for future opportunities. As the largest transaction in the City since the onset of the credit crunch it underlines our confidence in rising investor interest for London property as value becomes more apparent.'

The offices house the European headquarters of the Willis Group and are fully let on 25 year leases from 2007. British Land will top up the rent-free period up to the minimum uplift on the tower in 2012 at a total cost of circa £60mln.

St Martins, the real estate investment arm of the State of Kuwait, is a leading development, investment and asset management company with a diverse portfolio throughout the UK, Europe and Australia. The company's portfolio in London includes a 19,000 m2 landmark office building being developed at 150 Cheapside which is due for completion later this year.

The company has also submitted planning applications for a 9,984 m2 office building at 5 Cheapside, adjacent to St Paul's Cathedral.