The German fund, DIFA, is reportedly in talks with Chelsfield over the £120m acquisition of The Point building at Paddington Basin. The Point comprises 235,000 sq ft of office space and is let to the mobile phone operator, Orange, which signed up for the building in 2001.
However, Orange has since decided against occupying the building as the cost of relocation and fitting out would have been too high at a time when the company was trying to cut costs.
Orange is still locked into its 25-year lease and is paying an estimated £7.75m in rent. It is trying to sublet the property and is believed to be in negotiations with a potential occupier over a single floor of 18,000 sq ft.
The planned disposal is part of Chelsfield’s strategy of selling its income-producing assets in order to repay debt, following Elliott Bernerd’s £900m management buyout earlier this year.
Chelsfield is also planning to sell the adjacent 240,000 sq ft Waterside building, which is the new headquarters of Marks & Spencer. The building is likely to be offered for around £140m.
The two buildings are owned in a 50:50 joint venture with the family of the private investor, Bruce Jarvis.
Chelsfield has instructed BH2 to handle the disposals. Edward Symmons & Partners is advising the Jarvis family.