Langham Estate Deal Caps Late West End Flurry, But Transactions Fall Short Of £3B
Elliott Management and Oval Real Estate exchanged on a portfolio of properties from the Langham Estate in late December after being selected as the preferred bidders a month earlier.
The sales of the 430K SF portfolio, which consists of a diverse collection of offices and stores in London’s West End, was the largest deal in the area in 2023 and came after a late surge in deals in December.
The Elliott-backed venture had originally offered about £360M to buy real estate, including restaurants, bars and apartments, from an entity owned by Samuel Tak Lee, though the final figure has not been disclosed.
Elliott and Oval had been granted an exclusivity period to complete the deal, which added to a late flurry of deals that took the total figure from about £2B at the end of November to nearer £3B by the end of the year, according to Savills.
November saw 10 deals totalling £496M, accounting for 19% of the total volume for the year and bringing the annual total to more than £2.8B across 71 transactions. Only five other transactions were for £100M or more. Of these, two were retail-led transactions on Old Bond Street, with the remaining three representing value-added opportunities.
Approximately £900M of new deals were agreed on in November, bringing the total sum under offer to more than £1.2B. However, 2023 was still the lowest year in transactional activity since 2009's £3B and well below the £9B peak in 2014.
The news comes after figures showing that Middle Eastern investment into central London offices stood at £621M as of November, already in line with the average from 2018 to 2022 of £618M. This period also marks the busiest for Middle Eastern office investors since 2019, when the first nine months reached £817M.
BNP Paribas Real Estate said that there is a “window of opportunity” to secure central London office and retail investments in 2024 at opportunistic capital values as valuations become more realistic and debt providers encourage what it called “more consensual sales,” boosted especially by off-market deals.
Major late year deals included Federated Hermes and CPPIB’s disposal of Haymarket House, SW1, advised by Savills. The building comprises a freehold half-acre site, including 85K SF of vacant offices to be converted to hotel accommodation, and leisure accommodation on the lower floors providing nine years’ income secured against three tenants.
Other notable value-add trades included the disposal of 8-10 Great George Street, SW1, by FHPUT and a freehold office in Westminster with consent for a 134-bed hotel scheme and a 21-unit residential scheme. The £57.5M price came to £1,055 per SF at a 36% discount to the original guide price in the first quarter of 2022.
M&G sold a 50% stake in the Fitzrovia at 247 Tottenham Court Road, W1, to Lothbury and Nomura, following a competitive bidding process based on an estimated gross development value of £191M on the consented scheme, according to Savills. Once complete, the scheme will comprise circa 60K SF of offices, with retail at ground and lower ground levels and eight residential units.
Savills reported that prime West End office yields remain at 4%.
