The Great Capital Partnership (“GCP”), the 50/50 Joint Venture between Capital & Counties Properties PLC (“Capco”) and Great Portland Estates plc (“GPE”) announces today that it has exchanged contracts to sell The Jermyn Street Estate, SW1 to GPE for £120 million or £60 million for the half share GPE does not already own.
The Estate consists of five properties, 54-56 Jermyn Street, Dudley House, Egyptian House, Empire House and Foxglove House. All these assets are held on separate 125 year headleases from The Crown Estate at a combined fixed headrent of £675,000 per annum until September 2014, thereafter reverting to 10% of rents received.
The properties comprise a mix of office and retail accommodation and extend to a total circa 133,000 sq. ft. with frontages to both Piccadilly and Jermyn Street. There are currently 62 occupiers across the Estate including Standard Chartered Bank, Wiltons, Starbucks and Kent & Curwen. GCP completed a comprehensive refurbishment of circa 27,700 sq. ft. of vacant office accommodation in June 2012, of which 3,800 sq. ft. (14%) has been let so far. The properties generate a current net rental income of circa £4.5 million after payment of the headrent and have an estimated net rental value today of £7.3 million. The sale reflects a net initial yield of 3.7% and net reversionary yield of 6.0% after the deduction of actual costs incurred in the transaction. The Estate was sold at a 3.3% premium on the June 2012 valuation.
Completion of the purchase is conditional on approval from both the freeholder and lenders to GCP.