5 Asset Sales That Will Test Appetite For London Real Estate
Five very different assets worth a combined £1B have been put up for sale as the final quarter of 2018 approaches, each of which will test appetite for different types of London real estate.
Here are the details.
South Bank Central
Hermes and CPPIB have appointed CBRE to sell the South Bank Central office tower for £280M, according to CoStar. The 264K SF building is prime, being fully let and refurbished in 2016, but is quite complex — the 178K SF of office space and 33K SF of retail space is split across two buildings, and half of the office rent comes from WeWork, so the sale will test appetite for WeWork's covenant and for slightly unconventional assets. The remainder of the building is 191 luxury flats, all of which have been sold, including a block of 39 sold to investment firm Jackyl for £125M in April.
One Bartholomew Lane
Hines has put One Bartholomew Lane in the City up for sale for £104M, in what will be a test of the levels at which multi-let City property leased to financial services firms sells. The price for the 80K SF building represents a yield of slightly more than 4%.
Sanctuary Buildings
Blackstone is selling the 261K SF Sanctuary Buildings at a healthy profit: Bought for £175M in 2014, the asset is now up for sale for £285M, a 4.2% yield. It is leased to the government for 15 years, and will be a test of the market for buildings with refurbishment potential, with plans to undertake a major refurb shelved by Blackstone in favour of a sale.
St Thomas’ Hospital land sale
St Thomas’ hospital has put a 5-acre plot opposite its main hospital up for sale with a price tag of £200M. The site, across the river Thames from the Palace of Westminster, will likely be used for a mixed-use housing and commercial development. While prime assets with long leases have sold well in London in the past couple of years, appetite for development is more patchy given the slower economy — will there be takers for such an expensive site?
The Clerkenwell Collection
A private investor has appointed Lewis & Partners to sell a portfolio of seven buildings in Clerkenwell, according to CoStar. Totalling 194K SF, the portfolio is being sold at a 4% yield, and will test pricing levels for the Midtown district.
