Hammerson plc has agreed to acquire ownership of three buildings from the London Stock Exchange for an initial price of £68 million including costs.
The properties, all of which are freehold, comprise the London Stock Exchange tower building, the former Stock Exchange market building and 24 Throgmorton Street, the former Post Office building. It is anticipated that completion will take place in July 2004 following the London Stock Exchange’s relocation to Paternoster Square.
Hammerson will make an initial payment of approximately £34 million on completion, with the balance due in December 2005. The London Stock Exchange may be entitled to an additional payment, capped at £6 million, based on the profitability of any redevelopment.
The properties, which are bounded by Old Broad Street and Threadneedle Street to the South and by Throgmorton Street to the North, occupy a prominent location near the Bank of England, in an area which has seen significant improvement in recent years.
The 0.6 hectare site has planning consent for a total of 45,500 m² (490,000 ft²) of high quality office and retail space. The scheme designed by architects, Nicolas Grimshaw & Partners, comprises two principal elements: the refurbished tower building, incorporating an adjoining new East building; and a new low rise West building. Totalling 28,800 m² (310,000 ft²), the tower will be arranged over ground and 26 upper floors and provide six retail units at ground floor level. The new West building, which will replace the former Stock Exchange market building, will provide 16,700 m² (180,000 ft²) of accommodation, with provision of eight upper floors of offices and five retail units at ground floor.
It is anticipated that a redevelopment will be undertaken on a phased basis, commencing with the refurbishment of the tower building and construction of the East building, with a possible start on site during 2005.
The acquisition will be financed from the group’s existing financial resources.
John Richards, Chief Executive of Hammerson, commented:
“I am delighted that Hammerson has agreed to acquire this prominent and well located building. This acquisition is in line with the group’s strategy of maintaining a pipeline of future development opportunities and recycling capital. Since the beginning of 2003, we have raised nearly £250 million from the disposal of office properties in central London. I believe that the future redevelopment and ownership of these buildings will generate attractive returns.”
Hammerson was advised by Strutt & Parker and the London Stock Exchange was advised by CBRE.