Business
Great Portland Estates sells Rathbone Square
Great Portland Estates sells Rathbone Square.
About this update from Great Portland Estates Plc
[{"type":"text","content":"\n \nRNS Number : 5501W Great Portland Estates PLC 10 February 2017 \n\n10 February 2017\n \n \nGPE sells Rathbone Square, W1 for £435 million and proposes to return the profit of £110 million to shareholders\nGreat Portland Estates plc (\"GPE\") has sold the freehold of Rathbone Square, 35/50 Rathbone Place, W1 to Rathbone Place Jersey Limited, an entity owned by WestInvest Gesellschaft Für Investmentfonds mbH and Deka Immobilien Investment GmbH (\"Deka\"), for a headline price of £435.0 million, reflecting a net initial yield to the buyer of 4.25%. The sale is expected to crystallise a whole-life capital return for GPE from the entire development project of approximately £110.0 million which is proposed to be returned to shareholders by way of a special dividend. The sale of this mature property and the proposed special dividend reflect GPE's ongoing commitment to both capital allocation and balance sheet discipline, whilst also ensuring that GPE retains the significant financial flexibility created over recent years as it looks ahead to a continued period of market uncertainty.\nThe 419,700 sq. ft. mixed used development is currently under construction with phased practical completion (\"PC\") expected from late March 2017. The 242,800 sq. ft. of office space is pre-let to Facebook on 15 year leases (no breaks) at an initial annual rent of £17.8 million. 13,900 sq. ft. of the 25,200 sq. ft. of retail space is under offer and 139 of the 142 private residential units have already been exchanged for sale (on 999 year leases). The estimated rental value of the entire scheme (including residential ground rents) was £19.7 million at 30 September 2016. Following this transaction and the sale of the remaining residential units, total receipts from Rathbone Square are expected to be more than £655.0 million.\n \nThe headline price of £435.0 million is before deductions for Facebook tenant incentives (including a 30 month rent free period and a capital contribution of £12.3 million which will be paid by Deka) and maximum retail unit rent guarantees of £3.2 million, totalling £60.2 million, resulting in a net purchase price payable by Deka to GPE of £374.8 million (subject to final area measurement and settlement of the retail rental guarantees). The consideration comprises £368.3...