Sale of Tower 42 in London
BlackRock UK Property Fund, LaSalle Investment Management (on behalf of the Royal Mail Pension Plan) and Hermes Property Unit Trust exchanged contracts for the sale of The Tower Unit Trust, which owns the freehold interest in the landmark Tower 42 Estate, to an entity controlled by Ki Corporation, the holding company of the Kirsh Group, for USD 446.5 million (GBP 282.5 million). This reflects a net initial yield of circa 7% once the Estate is fully let and income producing.
The 324,000 sq ft (30,112 sqm) Tower 42, at more than 600 ft in height, is one of the tallest buildings in the city of London. The Estate is 95% let and will increase to 98% once a few current lettings are finalised; it attracts tenants from a strong and varied occupier base while achieving market-leading rents.
The Estate includes five other commercial buildings on a 2.2 acre freehold site. These include three modern developments on Old Broad Street comprising – 20 Old Broad Street (36,000 sq ft/3,346 sqm), 30 Old Broad Street (49,000 sq ft/4,554 sqm) and the Plaza Restaurant (3,500 sq ft/325 sqm). There are two additional buildings on the Bishopsgate elevation including – 15 Bishopsgate (46,000 sq ft/4,275 sqm), which is a potential redevelopment in 2013 and the Grade I Listed Gibson Hall (13,000 sq ft/1,208 sqm).