Landsec Lines Up Biggest London Office Sale Since Pandemic Began

London’s largest commercial property owner is lining up the sale of its biggest single asset in the UK capital, in what would be the biggest office sale since before the coronavirus pandemic if a deal completes. 

Landsec is weighing the sale of 21 Moorfields in the City of London for a price of around £850M, React News reported. It would look to reinvest the money into its development programme.

The largest asset sold in London since March last year is Dolphin Square, the rented residential block in Pimlico, data from Real Capital Analytics showed. AXA Investment Managers - Real Assets bought the building from Westbrook for £850M last year.

The largest office sold since the pandemic began is One London Wall Place in the City, which AGC Equity Partners bought from Brookfield in October for £477M. Google is in talks to buy an office it occupies in Central Saint Giles in the West End for £725M. 

The last time a sale of such magnitude was underway was Almacantar’s sale of the 572K SF Southbank Place office scheme near Waterloo. Blackstone was in talks to buy the building in early 2020 for £825M before the pandemic put an end to the deal. 

Landsec’s 21 Moorfields totals 564K SF and is under construction, with completion due in 2022. Investment bank Deutsche has agreed to pre-lease at least 469K SF on a 25-year lease, with the bank renewing its commitment to take the space after the pandemic had started. 

In spite of the debate raging about the future of the office, investors have been happy to pay yields of 4% or below for City of London office assets with long leases to good credit tenants.

Landsec has been a major seller of its fully leased office assets in the past year. Rothesay Life is in talks to buy the Ministry of Justice’s Victoria HQ for £600M. The decision to sell 21 Moorfields means the REIT has earmarked £2.3B of its London office assets for sale in the past 12 months, React reported.