Tishman Speyer and PSP Investments are preparing to sell their £500m Verde office block in Victoria, SW1.
Knight Frank and Eastdil Secured have been interviewed to prospectively advise on the future of the 317,083 sq ft building previously known as Eland House, as strong occupational interest in the building is likely to bring it close to fully let in the coming weeks. Subject to the details of the final leasing deals, a sale at the proposed price would reflect a yield of around 4.25%.
If sold at the guide price, this would be the largest West End deal since August 2013, when Sirosa paid £610m to buy Shell Mex House, WC2, from Westbrook.
The sale will also be a test of the appetite among major Chinese and Hong Kong investors to make substantial investments outside of the Square Mile, which they have dominated this year with purchases including the Walkie Talkie and the Cheesegrater, both EC3.
Verde, which was formerly occupied by the Department for Communities and Local Government, has been comprehensively refurbished, and completed at the end of last year.
It is currently 65% let after marketing to tenants started in March through Colliers International and JLL.
Tenants already committed include Mirabaud, Pret A Manger, Oaktree Capital, PA Consulting, Waitrose and PSP itself.
The sale of the building, along with the prospective sale of 100 New Oxford Street, W1, will leave Tishman Speyer with three properties remaining in central London – Economist Plaza in St James’s, SW1; the Point in Paddington, W2; and 33 Holborn, EC1.
Tishman is looking to take advantage of strong demand for mature assets, but it is still actively looking at both core and value-add opportunities in London. It has, however, held off from making new purchases due to strong pricing and has not made an acquisition in London since buying Economist Plaza for £130m from Pearson in February last year.
This year it has explored the purchase of 2&3 Bankside, SE1, which was bought by Deutsche Asset Management in June for £310m, and Elizabeth House, SE1, which was bought by HB Reavis for more than £250m.
It is deploying capital into the refurbishment and redevelopment of the Grade II listed Economist complex, including a rooftop extension that will add an extra 4,600 sq ft of offices, bringing the total office space to 86,300 sq ft, plus additional retail and leisure space.
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