New Star takes £20m hit on EC3 sale

  New Star Asset Management has made a near £20m loss from the sale of the largest holding in its £1.5bn UK Property fund.   The UK fund has sold 60 Gracechurch Street, EC3, to Evans Randall for £127.5m, reflecting a 5.5% yield.   The fund bought the building – which is the UK headquarters to Commerzbank – just 14 months ago for £145m, a 4.75% yield.   Despite the loss, the fund said that the sale was a “a promising sign that liquidity and transaction levels have picked up in the UK commercial property market” because of the level of interest from investors for the building.   It added the sale reflected “good value for the City office market”.   The disposal follows a review of the New Star UK Property Unit Trust, which will result in the fund reducing its single asset exposure in its portfolio.   It said it also plans to use part of the proceeds from the sale to be invested in listed property shares “to take advantage of their significant discounts”.   New Star said that the fund’s liquidity position has risen to in excess of 25% of the fund’s total assets under management as a result of the sale.   CB Richard Ellis advised New Star and Evans Randall.   darren.lazarus@rbi.co.uk