Cording Danmerc, part of the Cording Group, has completed a GBP52m deal to sell the long leasehold interest in one of Mayfair’s prime office addresses, 2 Park Street.
The 48,000 sq ft building produces a net income of over GBP2.4m a year and was sold to London Global for a yield of around 4.4 per cent.
The Park Street office was acquired in 2010 for GBP41.95m as part of a strategy to reposition its client portfolio towards core plus investments in the West End. It was partly vacant and post acquisition was repositioned through refurbishment, as well as a change of planning to a higher value use over the basement. The transition and full letting was concluded at higher rents than forecast.
Mark Millar, head of portfolio management at Cording Group, says: “The sale was prompted by the strong demand for prime office investments and the convergence in yields being paid for freehold and leasehold properties.
“While we can see that this demand may continue in the short to medium term, the sale will give our client the opportunity to reinvest in other parts of the market which look better value on a risk adjusted basis, having higher income returns and good prospects for rental growth.
“Our broader strategy is to continue to look at some of the London sub-markets where rents have lagged behind the core markets, such as in west London where we recently completed the GBP20m purchase of 80 Hammersmith Road. Alongside London, we also continue to focus on the main regional cities which we believe are offering some interesting opportunities.”
The sale of Park Street, W1 was undertaken by Jones Lang LaSalle, which advised the vendor.