Published 19 July 2006
Hammerson plc has sold its leasehold interest in 83-85 Pall Mall, London, to a UK pension fund client of Orchard Street Investment Management LLP for a net consideration of Â£36.7 million an Â£8.3 million (22.6%) premium over book value.
The net passing rent on the property is Â£1.4 million, which represented a yield of 4.93% on book value. At the sale price, the yield was chopped back to 3.81%.
The building was held on a long lease from the Crown Estate. Hammerson bought it in 1982, redeveloped 2 years later to provide 4400mÂ² of high-quality office space, and refurbished it in 1999.
Hammerson chief executive John Richards said the sale was in line with the company’s policy of recycling capital. Hammerson intended to reinvest the proceeds “in assets offering greater potential for asset management & development”.
On the other side of the deal, Orchard Street chairman Chris Bartram said: ” We are delighted to have acquired this asset, which has significant reversionary income potential and is in a market where we see good growth in the years ahead.”
Attribution: Company release, story written by Bob Dey for this website.