Tishman Speyer has purchased a large office building in central London from the UK’s largest listed property company Land Securities.
The London-based company, which has more than 29 million square feet of real estate on its books, announced it had sold Eland House in London Victoria to the New York-based real estate developer and investment manager in a deal valued at £171.1 million (€205.4 million; $265.7 million).#
Tishman Speyer is not thought to have acquired the property through a fund but rather with its own resources alongside an unnamed partner.
The property, built by Land Securities in 1995, comprises 253,000 square feet let to the British Government’s Department for Communities and Local Government on a lease expiring in 2021.
According to an analyst note by JP Morgan, the property was regarded surplus to requirements by the London company.“The Victoria building was not part of Land Securities’ master plan in Victoria and, frankly, the company never spoke about it,” said JP Morgan‘s Harm Meijer describing the property as the number one priority on Land Securities’ disposal list.
He warned too that there was a “high chance” the building’s tenant would leave when there is a break in the lease in 2016. He said: “The key point to judge whether the sale was good or not, is to take a view on the upcoming lease expiration in 2016 and chance of finding other tenant or reposition the building.”
He added the sale was between 5 percent and 10 percent below the building’s September book value but said that value, in JP Morgan’s opinion, was too high and came about as a result of a sale of the building which was supposed to happen in 2011 but which never materialised.
Despite that, Julian Stocks, managing director of Tishman Speyer in the UL said in a statement: “We are delighted with this latest addition to our London portfolio which follows recent purchases in Frankfurt and Paris. Eland House is a Grade A office building in a great location which will improve further as Land Securities develop their Victoria Circle Scheme”.