Great Portland Estates sells London office block for £65m

FTSE 250-listed Great Portland Estates said it had exchanged contracts to sell 55 Wells Street, W1 to an unnamed overseas investor for a headline sale price of £65.46m.

The headline price reflects a net initial yield of 3.99% and a capital value of £1,674 per sq ft. Completion is scheduled for 19 October 2018, the company said.

It added that the sale price equated to £64.60m after deduction of tenants incentives and vendor top ups.

The six-storey office block was developed by GPE in 2017. The total income is £2.8bn a year inclusive of vendor top ups, reflecting £82.80 per sq ft overall and the weighted average unexpired lease term is 10 years.

In a separate announcement, the company said it signed 24 new lettings across 90,000 sq ft, generating £4.4m in rents during the quarter to 30 September 2018 with market lettings 6.5% ahead of the March 2018 ERV.

GPE also settled seven rent reviews in the quarter, securing £2.3m for the firm, an increase of 16.3% over the previous rent and 3.2% ahead of ERV.

"In total, GPE has signed 135,400 sq ft of new lettings since the start of the financial year (1 April 2018), generating a combined annual rent of £8.1m (GPE share: £6.3 million), with market lettings 4.8% ahead of March 2018 ERV. Today we have a further 38,600 sq ft under offer for a combined rent of £1.7m, 1.8% ahead of March 2018 ERV," the company said.