Great Portland Estates is closing in on adding a £140m Midtown trophy to its portfolio.
The REIT is understood to be the frontrunner in the race to buy 200 Gray’s Inn Road, WC1, from US opportunity fund Beacon Capital Partners.
It has bid close to the £140m asking price, reflecting a yield of around 6.75%.
Derwent London has also laid down a bid to buy the 282,000 sq ft property, which is home to the ITV News and Channel 4 News television studios.
The iconic Foster & Partners-designed building generates a rental income of £8.9m pa. The lease has 12 years remaining.
Beacon began sounding out investors over the potential purchase of three of its London assets last year, as revealed by Estates Gazette (20 December 2010, p21).
At that time, ING REIM’s Malaysian client, Employees Provident Fund, US pension fund Teachers Insurance & Annuity Association, and several Middle East and Far East sovereign wealth funds were thought to have been approached.
Beacon formally instructed Jones Lang LaSalle to sell 200 and 214 Gray’s Inn Road last month. The Midtown assets have attracted widespread interest, particularly from UK REITs, as they offer attractive reversionary potential with more than 87% of the rent reviews due over the next two or three years.
A source said: “This asset is one of the jewels in Midtown’s crown. Given that it is outside the City core, it has been more attractive to UK institutions which really understand that market and see its potential for rental growth.”
