British Land has sold a 75% interest in three West End buildings, including its own headquarters, to Allianz Real Estate, on behalf of several Allianz Group businesses, for £401m.
The sale price for 10 Portman Square, Marble Arch House and York House, which are all in Marylebone, W1, represents a blended net initial yield of 4.32%.
British Land will retain the remaining 25% stake in the properties and will receive a fee for continuing to manage them.
British Land occupies around 39,157 sq ft at York House and has signed a new 10-year lease with Allianz. The 100,000 sq ft of office space in the building, which includes 22 residential apartments, also has GIC as a tenant.
Opposite York House, Marble Arch House provides 76,000 sq ft of offices, while 10 Portman Square has 134,000 sq ft of office space. Tenants include Fulcrum Asset Management, Weston Homes and the European business of Saudi Aramco, according to Radius Data Exchange.
The assets had a combined value of £508m as of 30 September and generate a net rent of £21.1m.
The deal is expected to complete in January and British Land said that prior to any reinvestment it would reduce its underlying earnings per share by around 1.4p and LTV by 2.7%.
British Land said the sales provided it with “greater flexibility to invest in developments, including Norton Folgate, which we committed to in November, and Canada Water” where it signed its first tenant earlier in December.
Simon Carter, chief executive at British Land, said: “This transaction demonstrates that, like us, investors remain confident in the long-term prospects for high-quality assets in prime London locations.”
Kari Pitkin, head of business development for Europe at Allianz Real Estate, added: “This transaction represents a great opportunity to invest in prime assets in a global city on behalf of our Allianz clients, thereby broadening our UK investment portfolio.”
The deal means British Land has now completed £1.1bn of asset sales in its current financial year.
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