London icon sells for £282.5m

Tower 42, one of London’s best known skyscrapers, has been sold for £282.2 million (€339 million; $442 million) by its joint owners BlackRock, on behalf of its UK Property Fund, and LaSalle Investment Management – below its £290 million price tag.

The estate comprising the iconic tower was put up for sale in September for the second time in as many years, with the joint owners saying they were seeking offers in excess of £290 million.

In a statement today, BlackRock and LaSalle, which manages the Royal Mail Pension Plan’s 50 percent stake in the estate, said they had exchanged contracts with the Kirsh Group, to sell The Tower Unit Trust at a net initial yield of around seven percent.

The sellers added that the estate was currently 95 percent let, but that occupancy would rise to 98 percent once new lettings were finalised.

In addition to the 600 foot high tower, the estate comprises five other commercial buildings on a 2.2 acre freehold site.

The acquisition is the first by the Kirsh group since its beneficiary, Nathan Kirsh, made a profit of around £50 million when he sold his 30 percent stake in listed developer Minerva in August to Area Property Partners and Delancey.

Marcus Sperber, head of EMEA Real Estate at BlackRock said in a statement: “The sale of this trophy building and its 2.2 acre estate is a landmark deal for the London City office market to end the year. The BlackRock UK Property Fund has had a long and successful association with this estate and we look forward to seeing the Kirsh group benefit from the attractive opportunities that exist on the estate.”

LaSalle began acting for Royal Mail from March 2010 when it won a mandate to manage the plan’s property investments. Julian Agnew of LaSalle said: “The sale of the (Royal Mail Pension Plan’s) share in Tower 42 is the culmination of a significant restructuring of the portfolio since taking over the fund 18 months ago. It repositions the portfolio to meet the fund’s future objectives.”