Great Portland Estates completes

Great Portland Estates has sold two London office buildings to Henderson Global Investors for £56.1m, and in return has bought another City office building for £19.5m.

GPE has sold Barnard’s Inn at 86 Fetter Lane, EC4, and 38 Finsbury Square, EC2, to Henderson’s Central London Office Fund.

Together, the two buildings comprise 148,000 sq ft and produce an annual rent of £3.4m. Around £800,000 will be paid to Henderson to cover outstanding rent-free periods. The deal reflects an initial yield of just over 6%.

GPE has also bought the freehold interest of Ellerman House, 12-20 Camomile Street, EC3. The building comprises 91,000 sq ft of office space and is located between existing GPE holdings. It is let to P&O Property Holdings until June 2005 at a current annual rent of £2.8m.

Toby Courtauld, Chief Executive of GPE, commented: “We are delighted to have agreed this transaction. Late last year we took a surrender of a lease of 85,000 sq ft of the 104,000 sq ft at Barnard’s Inn and simultaneously let 55,000 sq ft to Marriott, the international hotel group. Since then we have refurbished the three remaining floors of which one has been let and we have created a first class institutional product. At Finsbury Square the unexpired weighted average lease term is under two years and the building does not form part of our future plans in the City.

“Ellerman House is a significant acquisition for us as it lies between our existing holdings on Bishopsgate and St Mary Axe and together they provide a significant redevelopment opportunity in 2011 when the majority of our existing income expires. In the meantime it will be re-let on short term flexible leases when the existing income expires next year.”
Source: Freeman

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