Great Portland Estates (GPE) looks set to use funds generated by the £83m of sales it carried out over the past quarter to purchase Hammerson’s 18-19 Hanover Square, W1.
The office and retail block was offered to the market at £57m, a yield of 5%.
The acquisition comes as GPE announced a quarterly valuation showing a 4.1% uplift in its portfolio.
The value of properties, including acquisitions, has risen by £44.1m since 31 March, driving a 5.5% increase in net asset value per share to 461p.
Chief executive Toby Courtauld said: “The central London investment market remains competitive and the weight of money chasing property has continued to exert downward pressure on yields.
“On the occupational side, steady demand and falling supply are driving vacancy rates lower across central London, while in the West End the limited quantity of development starts is unlikely to reverse the position in the near term, and rental growth has become the main driver of value.”
Across the portfolio, rental values rose 2.7%, dominated by West End offices, up 4.2%. City and Southwark rents remained static.
The value of the group’s portfolio grew to £1.125bn, boosted by the acquisitions of two properties in Southwark for £13.8m.
The forward sale of GPE’s office scheme at Tooley Street, SE1, and the sale of Gillingham House, SW1, and 79 Cavendish Street, W1, generated £83m.
During the period, the company signed lettings worth £1m pa, with a further £2m on agreed terms. These include 21 Sackville Street, W1, at £80 per sq ft.
The Hanover Square property under offer is part freehold no 19 and part long leasehold no 18. It is let to Avanta Management Services and Lend Lease, with fashion house Dolce & Gabbana due to take one of the shops.
References: EGi News 21/07/06
