Hines, the international real estate firm, announced today that Bank of London and The Middle East plc has leased 1,393 m² (15,000 ft²) on the fifth floor of the landmark City of London office development, Cannon Place. The firm also announced that the 38,833 m² (418,000 ft²) project will come to market this month.
CBRE and Savills have been appointed as joint sales agents and will lead a global sales campaign which is expected to appeal to a wide audience of core investors.
The quoting price will be €683 mln (£500 mln) representing a yield of 4.4%, with expected rents of €8/m² (£67.50/ft²) for the remaining 7,896 m² (85,000 ft²) of prime office space.
With the new leasing activity, Cannon Place will be 80% let, with a broad tenant mix including CMS Cameron McKenna, the CBI, Franklin Templeton Investments, Columbia Threadneedle Investments and i2 Offices.
Ross Blair, Senior Managing Director and Head of Hines UK said: “Cannon Place is a landmark city office development in a core location with a premium tenant mix and a rare weighted-average unexpired lease term of over 15 years. Now that the building is close to being fully let, we believe this is the time to bring this significant development to the market. We’re expecting strong investor demand and we’re looking forward to opening up a dialogue with interested parties in the coming weeks.”
Investors will be attracted by the reversionary income profile of Cannon Place in the context of strong rents being achieved in the city of London such as €11/m² (£90/ft²) at The Leadenhall Building, €10/m² (£81/ft²) at the Sugar Building and €9/m² (£75/ft²) at 100 Cheapside.
With approx. €54 bln (£40 bln) of overseas capital targeting Central London and with investment volumes for the first half of the year around €12 bln (£9 bln), it is anticipated that Cannon Place will have broad international appeal.
The sale follows a number of high profile investment transactions in the City of London; most notably, Cathay Life’s acquisition of The Walbrook Building, EC4 for €786 mln (£575 mln) (4.0%), the Sinar Mas’ acquisition of Alphabeta, Finsbury Square, EC2 for €382 mln (£280 mln) (4.0%) and 110 Bishopsgate, EC2 which is believed to be under offer at €1,093 mln (£800 mln) (3.5%).
Source: Hines
