US giant Blackstone is in exclusive talks to buy the London headquarters of Bank of New York Mellon from Land Securities.
Time Square at 160-162 Queen Victoria Street, EC4, was offered to a handful of international investors with an asking price of around £245m, reflecting a 4.75% yield.
BNY Mellon occupies 232,000 sq ft in the 376,000 sq ft building (pictured) on a 20-year lease expiring in 2023, while law firm Dechert occupies around 55,000 sq ft.
LandSec is selling its 95% interest in the building, which it developed in 2003 in joint venture with Louis Dreyfus and Sableknight.
The REIT initially bought a 44.5% stake in Time Square in 2005 for £95m and a further 50.5% stake in 2007 for £144.4m. Louis Dreyfus & Co retains the remaining 5% stake in the freehold.
The joint ownership deterred several major Asian investors, which have been the dominant buyers of trophy City offices for the past few years.
Blackstone has also been an active buyer of large City offices in the past 12 months as part of its core strategy.
Its core City portfolio now also includes Alban Gate and 125 Old Broad Street, both EC2, and both multi-let.
“Blackstone was the first of the US private equity firms to launch a core strategy in London but it is likely that several others will do the same thing,” a source said.
LandSec has recycled capital from recent trophy sales, including 1+2 Bankside, SE1, into its London development pipeline.
