One of the
New Star Property Unit Trust has bought the headquarters of Prudential’s M&G fund – the 150,000 sq ft Governors House on Laurence Pountney Hill, EC4 – for £120m.
While the building has a rent review in April 2008, which could see rents rise, the acquisition is seen as a benchmark for the City.
The acquisition reflects an equivalent yield of just 4.5%.
The building – sold by a private Irish consortium Landmark Group – is let to Prudential at £43 per sq ft until 2018.
On Tuesday, New Star PUT raised the raised the cost for investors exiting the fund to prevent huge withdrawals of cash, as investors have become concerned that the property market may have peaked.
However, New Star fund manager Marcus Langlands Pearse said: “Our reasoning is that while secondary property is definitely coming off, yields on prime City buildings will be maintained – and that we are investing in the right area.”
