The sale price reflects a net initial yield of 5.1% and a premium over March 2013 book value of 3.2%. The disposal is conditional on freeholder consent and is expected to complete on 5 September 2013.
Following the sale, LondonMetric will repay the debt facility on both One Fleet Place and One Carter Lane, London, EC4 totalling £96m. After accounting for associated costs the net proceeds amount to circa £12.4m with a loss of net income of £1.3m pa. One Carter Lane will then be mortgage-free.
The disposal is in line with LondonMetric’s other recent transaction activity, which has been focused on selective disposals and recycling of proceeds into new investments which offer better opportunities to grow income.
Patrick Vaughan, chairman of LondonMetric, said: “The timely sale of Fleet Place conforms to our opportunistic strategy for the City. We bought this well positioned building in 2009, in turbulent markets, but with an outstanding tenant and a long lease, generating a yield of nearly 8%. This was well above the City’s long term average yield range and today’s disposal yield is close to the best of that range, which we consider an appropriate moment to sell.
“Our interest in the City remains very strong and is exemplified by our on-going development in Carter Lane.”
Jones Lang LaSalle advised LondonMetric and James Andrew International advised One Fleet Place Realty Limited.
Source: Paul Norman, CoStar News