EUROPE NEWS: Second time around

An estate comprising the iconic Tower 42 skyscraper in London’s finance centre is once again up for sale.

Joint owners BlackRock, on behalf of its UK Property Fund, and LaSalle Investment Management, which manages the Royal Mail Pension Plan’s 50 percent stake in the estate, said they are looking for offers in excess of £290 million ($458 million; €332 million) for the freehold interest, which also includes five other smaller buildings on the 2.2-acre site.
The estate previously was put up for sale last year, but no deal materialised and it was pulling from the market in August. Since then, LaSalle has replaced Hermes Real Estate as manager of the Royal Mail’s stake. The current asking price is about 3 percent lower than last year, but it still reflects a net initial yield in the order of 6.9 percent and a capital value of around £600 per square foot.

Jeff Morton, managing director at BlackRock, said: “Tower 42 remains one of the city’s prime landmarks. With limited supply and increasing demand exerting upward pressure on rents in the market, investors can anticipate strong returns and considerable long-term growth potential.”