L&G Completes Sale of 28 Cavendish Square to Lancer, Helping to Pave Way for Major Regeneration Scheme.
15 August 2014
Legal & General Property announces that it has sold the short leasehold interest in No. 28 Cavendish Square to its freeholder, Lancer, for a total consideration of £5.35 million, representing a net initial yield of 3.7%.
Forming a key corner piece of the Cavendish Island site, which stretches from Cavendish Square to Oxford Street and incorporates over 200,000 sq ft of offices, the BHS department store, nine Oxford Street shops and the London College of Fashion, the asset offers a major medium term development opportunity as part of the potential regeneration of the entire site. Lancer acquired the wider site in 2005, with the exception of 28 Cavendish Square and BHS, paying c.£425 million.
The property is situated on the southern stretch of Cavendish Square in a prominent position at the junction where Holles Street, which runs 100m from Oxford Street, meets Cavendish Square. The unit, which is let to the Royal Bank of Scotland until 2037, providing 23 years unexpired lease term, comprises 6,845 sq ft arranged as a banking hall and offices at basement, ground and mezzanine level.
One of the standout deals of Q1 2014, the property formed part of LGP’s March purchase of a portfolio of 55 assets backed by RBS from Telereal Trillium for a total consideration of £550 million. Signifying one of the largest portfolio acquisitions to be successfully undertaken by a UK fund in recent years, the deal represented a rare opportunity to acquire RBS’s flagship buildings, with a prime portfolio let to RBS on lease terms predominantly over 23 years with RPI linked reviews, representing a net initial yield of 5%.
The news follows the recent announcement that L&G has sold Coutts’ headquarters, 440 Strand, to Henderson UK Property Unit Trust for £175 million, representing a net initial yield of 4.34%. It has also sold 97 New Bond Street to Wittington Investments for a total consideration of £18,750,000, representing a net initial yield of 2.3%, 2-4 Lower O’Connell Street, Dublin – a prime retail investment in Dublin City Centre, to a Private investor for €11,437,000 reflecting 5.08%, and the Trident Portfolio to Direct Line for £10,400,000 reflecting 5.99%. Finally, it has sold Lee House, Baird Road, Enfield – a 47,171 sq ft industrial unit, fitted out as disaster recovery space – to Aviva Investors for £6,132,000, reflecting a net initial yield of 6.75%.
DTZ represented Legal & General Property and Hanover Green advised Lancer.
Notes to editors
- Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £465bn in assets on behalf of over 3,100 clients (30 June 2014) and provides products and solutions spanning all asset classes. LGP is the fourth largest institutional property fund manager in the UK, managing or co-managing 17 separate funds or vehicles including three segregated mandates with an aggregate asset value of £14.2bn as at 30 June 2014. These funds include:
- Balanced Funds
Life Fund; Linked Pensions; Linked Life; Managed Fund; Legal & General UK Property Fund; UK Property Income Fund I; UK Property Income Fund II; LPI Income Property Fund and the Hybrid Property Fund
- Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; Arlington Business Parks Partnership; and the English Cities Fund
- Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership.
- LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance. Owing to its size, diversity and penetration, it benefits from best-in-class banking and property contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities.
- Taking a client-centric approach, the business places the highest priority upon integrity and transparency, leveraging the significant resources provided by the wider LGIM platform. Protecting the medium to long term value of its portfolio, as a leader in sustainability, green principles are embedded into every property and investment decision.
- Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability. In particular, the Company has a major development platform, responsible for delivering community-focused projects ranging from West End landmark buildings to significant town-centre retail and leisure regeneration schemes.
- Forming part of the Group’s larger UK housing and infrastructure investment strategy, LGP also continues to participate in a growing range of supply side housing activities, including financing affordable homes, the house building sector, urban regeneration, student accommodation and care homes.
About Legal & General
Legal & General Property Limited.
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Registered in England 2091897.