The sale pre-completion of our prime office scheme at 12/14 New Fetter Lane, EC4 crystallised the significant value created through our development and leasing activities.
Crystallising development profits
In May 2013, we committed to build our 142,500 sq ft development in the heart of Midtown having secured an attractive planning permission, regeared the headlease with the City Corporation and significantly de-risked the development through pre-letting the entire scheme to law firm Bird & Bird for 20 years at an annual rent of £8.3 million.
With the construction works progressing on time and on budget under a fixed price contract, we sold our 151 year leasehold interest to TIAA‑CREF in December 2014, taking advantage of strong investment market conditions. The purchaser acquired the site from GPE for £96.3 million and is now funding all development costs up to maximum of £165.8 million, reflecting a yield of 4.5%. We also expect to receive a final payment of around £5.0 million on practical completion in late 2015.
The sale crystallised a return on capital since committing to the development of 82.7% and an unlevered IRR of 55.1%.