Our two simultaneous off-market transactions with Deka Immobilien in January 2016 successfully crystallised our development surpluses at 33 Margaret Street, W1 and secured GPE ownership of a next-cycle repositioning opportunity at 50 Finsbury Square, EC2, whilst also releasing £97.3 million of cash for re-investment into our current development programme.
Accessing new material
The sale of 33 Margaret Street, W1 for £216.3 million was the profitable culmination of six years’ work by our team, which has seen the property acquired, consented, built, leased and now sold. The property development was completed in December 2012 by GPE and comprises 103,700 sq ft of predominantly offices, which were fully pre-let to Savills plc for 20 years at an annual rent of £7.0 million. The sales price equates to £2,085 per sq ft, a low net initial yield of 3.3% and a 12.7% premium to the March 2015 valuation. The transaction crystallised an annualised ungeared IRR of 23.5% and a profit on cost of 137% for GPE.
We acquired 50 Finsbury Square, EC2 for £119.0 million. The 126,500 sq ft property is predominantly office space which is fully let to Bloomberg until June 2020 and generates a total annual rent of £6.6 million. The freehold property was developed in 2000 and is less than 200 metres from the Moorgate Crossrail station. The purchase price reflected £819 per sq ft on the office space and a net initial yield of 5.3%.