McKay Securities has completed the sale of its long leasehold at 30 Lombard Street, EC3, to ReInvest Asset Management for £76.5m.
The deal for the 58,500 sq ft City office block represented a net initial yield of 4.16% and a capital value of £1,308 per sq ft.
McKay will use the net sale proceeds to pay down debt, before further investment in new acquisitions and portfolio opportunities. The sale will reduce LTV to 29.6% on a pro forma basis.
The REIT acquired the long leasehold in 1999. It redeveloped the building in early 2019.
The offices, which have a BREEAM Excellent rating, are let to wealth manager St James’s Place on a 15-year lease until 2034 without breaks, with net rent of £3.4m per annum (£65 per sq ft).
ReInvest bought the asset on behalf of its DEREIF SICAV-FIS fund, which launched in Luxembourg. Its principal investor is an unnamed “major” German insurance company.
Hans Stuckart, managing director of ReInvest Asset Management, said: “London remains a robust and resilient market, offering good investment opportunities and very attractive purchase yields. Even the ongoing Brexit negotiations are having no noticeable effect in our segment, so we are expecting to see sustained growth.”
Martin Nolting, executive director for business development at ReInvest, added: “London is the financial capital of Europe because of its location, its dynamism and the great transparency of its market. Its importance as a gateway to Europe for international investors is not expected to diminish in the medium and long term. And so London will remain an attractive investment location.
“This is underlined by the fact that a significant proportion of take up in recent years has been from the technology, media and telecommunication sector.”
Knight Frank acted for McKay; BNP Paribas Real Estate advised the purchaser.
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