In line with its strategy to focus purely on retail assets, Hammerson plc announces that it has exchanged contracts for the sale of its office property at 10 Gresham Street, London EC2, for a total consideration of £200 million (approx. 251 million), representing an initial yield of 5.25%. Hammerson's share of the proceeds will be £60 million (approx. 75 million).
The purchaser is Kumpulan Wang Amanah Pencen ('KWAP'), the Malaysian state pension fund. The building was valued at £195 million (approx. 245 million) at June 30, 2012, and passing rents (Hammerson share) at that time were £3 million (approx. 3.77 million).
10 Gresham Street was acquired in August 2010 for a net price of £175 million (approx. 220 million) in a 30:70 joint venture with Canada Pension Plan Investment Board ('CPPIB'). The transaction will complete in October 2012.
The long leasehold building provides 23,600m2 of high quality offices, retail and ancillary accommodation. It is fully let, with Lloyds TSB Bank plc the principal tenant.
David Atkins, Chief Executive said: "This transaction further increases our retail focus and we have capitalized on investor demand to secure an exit above book value. The asset has shown a strong return during our ownership, and we have worked well with CPPIB where we have an ongoing relationship at Silverburn, Glasgow. We are now marketing Stockley House, the final office investment in our portfolio."
Hammerson and CPPIB were represented by Nabarro. KWAP was represented by CBRE Global Investors, Jones Lang LaSalle and Berwin Leighton Paisner.