Irish property development company Green Property has sold a high-spec office block in central London for nearly €261m.
The Dublin-based company — via its Kish Holdings subsidiary — yesterday announced its sale of the grade-A London office building 111 Buckingham Palace Road to international property investment firm Kennedy Wilson Europe Real Estate (KWE) for £204.3m (€260.9m).
Earlier this year, KWE boosted its Irish portfolio by shelling out €45m for two properties — including the Portmarnock Hotel & Golf Links resort in north Dublin — previously owned by Nama and the IBRC.
KWE is undertaking the London transaction by way of a share purchase and is funding the deal from its own cash resources.
Green Property chief executive Pat Gunne said the company is selling the property at “a very exciting time” for the property market in the Victoria area of central London, which, he said, “is going through transformational change”.
“The area is benefitting from substantial investment and redevelopment, which will see its attractiveness grow as a West End destination,” said Mary Ricks, president and chief executive of KWE.
“111 Buckingham Palace Road provides KWE with an exciting opportunity to enter the thriving Victoria market, where grade-A office vacancies sit at only 1.5% and prime headline rents exceed £80 per square foot,” she said, adding that KWE is targeting income yield of around 7%, with material rental growth coming from rent reviews and expiries.
The 227,165 sq ft landmark building is located directly over Victoria train station and the Victoria Plaza shopping centre. Its underlying value is £207.5m, reflecting a gross yield of 5.1%, which is expected to rise to around 7% following the execution of asset management plans.
Refurbished a decade ago, the building is fully occupied: It houses the headquarters of Telegraph Media Group, which accounts for 54% of the rental income as well as other businesses. It has a weighted average unexpired lease term of 5.7 years and average passing rents of £47 per square foot.
The building has already had a planning consent granted that will enhance its reception area and, according to Green, further its appeal to major occupiers.
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