Quintain Estates & Development plc has exchanged contracts to sell its various leasehold interests in the Mount Royal block on London’s Oxford St for Â£80 million to The Great Victoria Partnership, a joint venture between Great Portland Estates plc & the Liverpool Victoria Friendly Society.
The property at 508-540 Oxford St generates net income of Â£3.7 million/year, putting a 4.625% yield on the sale. But Great Portland said current rental value exceeded Â£7 million, which would put an 8.75% yield on the price for the 8222mÂ² of retail space on 8 leases. The transaction is also subject to landlords’ consent.
Quintain’s chief operating officer, James Hamilton Stubber, said the company wanted to invest in property with higher income returns.
The new partnership between Great Portland and the friendly society will start out with Â£122.7 million of assets this block & 3 others in central London. Each partner is contributing Â£33.5 million of equity, financed through cash & property contributions.
Great Portland chief executive Toby Courtauld said: “At Mount Royal, we have the opportunity to play a key role in the resurgence of the western end of Oxford St, an area suffering from a lack of investment in recent years and which, we believe, has good potential.”
15 October 2004: Liberty sells 25% of Great Portland Estates to Morgan Stanley