The Duke of Westminster’s property company is for the first time offering a long leasehold at a peppercorn rent, in a bid to attract investors who would normally bid only for freeholds.
Grosvenor is seeking offers in excess of £63m, a 4.77% initial yield, for a new 150-year headlease on a 55,000 sq ft block on Oxford Street, W1.
A source said: “A 150-year headlease at a peppercorn rent makes this much more attractive to a wider market. This is as close as Grosvenor can get to offering a freehold.”
The property at 431-451 Oxford Street, directly opposite Selfridges, includes Laura Ashley’s flagship store.
It is 85% let to retailers, including Boots and bank HSBC, with offices and flats making up the remainder. The total passing rent is £3m pa.
Cushman & Wakefield Healey & Baker is advising.
Two other prime retail pitches on London’s best-known shopping street were also put up for sale this week.
Hermes has instructed CBRE to seek bids starting at £30m for Tenterden House, 309 Oxford Street a 6.16% yield and Savills is marketing a Starbucks outlet at 324 Oxford Street for £9.9m, a 4.05% yield, on behalf of Merseyside Pension Fund.
Tenterden House comprises a store let to the Canadian shoe company Aldo at £480 per sq ft zone A, and Healey & Baker’s former office, which the agent vacated in 2002. It is sublet to seven tenants.
References: EGi News 19/09/05
