Great Portland Estates plc ("GPE") announces that, following the pre-let of the majority of the office space at its redevelopment of 33 Margaret Street, W1 to Savills plc ("Savills") in December 2011, Savills have now pre-let all the remaining 31,700 sq ft of office space in the building, paying £2.59 million per annum.
100% Pre-letting of the offices
In December 2011, Savills plc pre-let the majority of the office space at 33 Margaret Street, acquiring the remaining 31,700 sq ft of offices in March 2012 to allow for future expansion. On completion of the development in December 2012, Savills took occupation of 95,617 sq ft of offices, on seven separate 20 year leases, paying a total rent of £7.0 million equating to an average rent of circa £73.0 per sq ft.
Our 2009 rights issue enabled our investment management team to take advantage of opportunities in the market when prices were at historical lows. Together with our financial management team, they were able to negotiate and deliver a unique structure to unlock the off-market purchase of a prime development site at 33 Margaret Street, from a distressed overseas investor. The development team improved the planning permission, demolished the existing building and delivered a new Grade A office building, under budget, in December 2012. During the construction phase, our leasing team held discussions with potential tenants and the 95,617 sq ft of office space was entirely let eight months prior to completion to Savills plc through two transactions.
In 2016, we sold 33 Margaret Street to Deka-Immobilien for £216.25 million, reflecting a net initial yield of 3.30%, as part of a property swap securing GPE ownership of a next-cycle repositioning opportunity at 50 Finsbury Square. The transaction delivered a profit on cost of 137% and released £97.3 million of cash for re-investment into our development programme.
Helen Hare Head of Project Management, GPE
Our teams worked seamlessly to deliver a first class, fully pre-let development both under budget and generating a significant surplus for our shareholders.
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