This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email mike.phillips@bisnow.com.
Great Portland Estates plc has exchanged contracts on the sale of the freehold of 50 Finsbury Square in the City to a wholly-owned subsidiary of Wirtgen Invest Holding, a private German family office.
The headline price of £190M (subject to adjustment for final building area and retail leasing) reflects a topped-up net initial yield of 3.85% and capital value of £1,471 per SF, or £1,690 per SF on expiry of rent-frees, and is broadly in line with the March 2022 book value after adjusting for estimated capex to complete.
GPE will retain responsibility for delivering the 122K SF development with completion of the sale expected in Q1 2023 following practical completion and commencing leases of the office and retail space. Net proceeds will be initially used to pay down GPE’s revolving credit facility and will reduce the company’s loan to value from 22% to 17%.
Originally a Fosters & Partners-designed building, 50 Finsbury Square is undergoing a comprehensive refurbishment, with practical completion scheduled for Q4 2022. Sustainability and wellbeing have been at the heart of the refurbishment. When complete, the building will be BREEAM Excellent as well as GPE’s first net-zero carbon development.
PEOPLE
Roger Blundell, board member and chief financial officer for Grosvenor’s UK property business, is stepping down at the end of the year and moving to a portfolio of non-executive and advisory roles.
Debbie Lee will succeed him as board member and chief financial officer on 1 January 2023. She has been at Grosvenor for more than seven years, most recently as group reporting director and, before that, as director of corporate finance in Grosvenor Property UK. She is currently interim executive director for Grosvenor’s London estate.
Before joining Grosvenor, Lee worked for 13 years at Deloitte, where she was a director in the Real Estate Corporate Finance team and spent four years in PwC’s external audit practice.
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Cluttons has appointed Gráinne Gilmore as head of research.
Gilmore has been writing and commenting on property for more than 20 years. Most recently, she was head of research for Zoopla. She was also head of UK residential research at Knight Frank for eight years, where she led a team focusing on all aspects of residential sales and rental, residential development, and the specialist build-to-rent, student and later living housing sectors.
SALES
The Livingstone Brothers bought a 3.5% stake in listed hotel giant Whitbread, which owns the Premier Inn brand. The duo paid about £165M for the stake in Whitbread, which has a market capitalisation of about £5B. Their London & Regional vehicle has a major portfolio of UK hotels. Whitbread owns or operates more than 800 hotels across the UK. Its shares have dropped 22% this year.
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LaSalle Investment Management and Trilogy Real Estate bought the former London Metropolitan University buildings, 41-71 Commercial Road and the Met Works Building, in the Aldgate district of the London Borough of Tower Hamlets.
The estate includes 133K SF of innovation and education space set inside two buildings on a 1-acre site. The campus had previously been in use as workshops and teaching space for London Metropolitan University.
The building was acquired subject to more than 40% of the space being pre-leased to two providers of further and higher education: Nottingham Trent University’s Confetti Institute of Creative Technologies and Access Creative College. The Commercial Road campus will be substantially refurbished and expanded to circa 150K SF.
LEASES
DTZ Investors has fully leased up its first Folk co-living asset, The Palm House, in Harrow and Wealdstone, north London.
The 222-unit co-living building launched in late February 2022 and is the seed asset funded through COLIV Fund I, the world's first large-scale co-living fund.
Rent for studios at The Palm House is inclusive of all bills, with zero deposit. It gives residents access to a large coworking space, surround-sound cinema, a gym and a weekly event programme. The eight-story, 87K SF building also features two terraces and a MasterChef-style communal kitchen.
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Deliveroo has launched its first bricks-and-mortar grocery store in the UK, in partnership with Morrisons. Customers will be able to walk into the New Oxford Street store to order and shop for groceries including Morrisons’ Ready to Eat and The Best ranges.
It comes as new research from Deliveroo reveals the need for convenience and availability, with around one in three dinner plans decided on the day and ingredients bought on the way home. It will also serve as a fulfilment centre for orders on the Deliver app.
CONSTRUCTION AND DEVELOPMENT
Edge and Goldman Sachs Asset Management have brought in new funding partners and appointed a contractor to build their new £500M office project near London Bridge.
Local Pensions Partnership Investments and The London Fund (a collaboration between Local Government Pension Scheme investment pools, LPPI and London CIV) have been brought on board as investors in the scheme. The joint venture has appointed Mace as the general contractor for its 260K SF EDGE London Bridge project.
Construction will commence in January 2023 and is due for completion in early 2026.
FINANCING
Apache Capital, Harrison Street and insurer NFU Mutual have refinanced The Lexington, a 325-apartment build-to-rent alongside developer-operator Moda Living.
A £70M facility from Deutsche Bank refinanced the legacy development loan with a new investment loan. The scheme has a gross development value of £115M. The asset is now stabilised, having opened 40% let in September 2021.
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LaSalle Investment Management has been selected for a global real estate investment mandate by the Government Pension Investment Fund of Japan. With Mizuho Trust & Banking Co. acting as gatekeeper, the mandate will pursue co-investments, joint ventures and club deals.
The size of the mandate was not disclosed, but GPIF is the world’s largest pension fund, with £1.2T of assets under management.
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Silbury Finance, the Oaktree Capital Management-backed development lender, has provided UK retirement village provider Audley with a £59M investment facility, secured against four retirement villages located across Greater London and the Midlands.
The two-year, 75% LTV facility refinances an existing loan and will support Audley as it progresses with the sale of the final 118 homes across the four villages. They are located in Chalfont Dene, in Buckinghamshire; Cooper’s Hill, in Surrey; Ellerslie, in Worcestershire; and St George’s Place, Birmingham.
The villages comprise 466 units in total. Silbury has originated about £230M of new lending since July.
