Hammerson plc has exchanged conditional contracts for the sale of three office properties in central London, 21 Moorfields, EC2, Grant Thornton House and 40 Melton Street, Euston Square, NW1, to a subsidiary of Fordgate, a private company, for a total of ÃÂ£122 million. The three properties were valued at ÃÂ£128 million as at 31 December 2002.
Built in 1973, 21 Moorfields is a 14,000 mÃÂ² office building, which is let to Lazard Bros & Co. (who are not currently in occupation) under a lease expiring in 2008. Hammerson acquired the building in 1992, and it now produces a rental income of ÃÂ£5.6 million per annum. In 2001, Hammerson obtained outline planning consent to redevelop the site with a new office building of 40,000 mÃÂ². Under the terms of the sale contract, Hammerson has been retained as development manager and granted an option to participate in any redevelopment of the site.
The other two office buildings were acquired by Hammerson in 1999 as part of its acquisition of the Euston Square Estate. Grant Thornton House provides 6,400 mÃÂ² of offices and is leased to Grant Thornton, whilst 40 Melton Street, provides 10,800 mÃÂ² of offices and is leased to Network Rail. The two buildings generate an aggregate annual rental income of ÃÂ£5.6 million. Hammerson has retained its interest in One Eversholt Street, Euston Square (previously known as Blocks C and D), which provides 10,900 mÃÂ² of office space.
Following completion of the transaction, the groupÃ¢â¬â¢s office buildings in central London will account for around 17% of the total portfolio on a pro forma basis, compared with 19% at 30 June 2003.
John Richards, Chief Executive of Hammerson said:
Ã¢â¬ÅThis sale will release resources for investment in other projects. The group has a substantial pipeline of future development opportunities both in the retail and office sectors.
TodayÃ¢â¬â¢s transaction enables us to participate in the future redevelopment of 21 Moorfields and our retention of One Eversholt Street provides potential for Hammerson to be involved in any future redevelopment of Euston Station.Ã¢â¬Â
Hammerson was advised by CB Richard Ellis and BH2.