FTSE 100 listed property developer, Land Securities (LON:LAND), announced on Monday that it has agreed a deal for the unconditional acquisition of 55 Old Broad Street, for a consideration of £87 million.
The deal will see that company acquire the 100,000 sq ft, 10 storey, office-led building in East Central London from PGIM Real Estate, with an initial yield of 4.1% – topped up to 5.8%.
The site wraps around the Land Securities City office tower – Dashwood – and is a two-minute walk from the prominent Liverpool Street station. The company’s statement added that the building is 87% let by income to businesses including Ecom Agrotrade, GB Rail Freight and Barclays.
Speaking on the deal, Nick de Mestre, Head of Investment at Land Securities, said: “55 Old Broad Street is a well-located asset in the heart of London. The development potential of this asset, combined with the potential for Dashwood, offers Landsec the opportunity to deliver a compelling, best-in-class destination over the medium term. This acquisition demonstrates our commitment to optimising our central London portfolio through the reinvestment of capital, as set out in our strategy.”
Charles Crowe, Head of UK Transactions at PGIM Real Estate, added: “I am pleased with the significant value we were able to create through our ownership of 55 Old Broad Street and its successful sale. PGIM Real Estate had reached the end of its business plan by achieving leasing stabilization post refurbishment and engineering a block date in 2024, that will enable a larger re-development of the site. The sale crystallizes a strong return since purchase in 2012.”
Following the acquisition announcement, Land Securities shares fell by 2.77%, to 705.50p 07/12/20 13:54 GMT. This price is around 7% short of its target of 757p a share, and around 2.6% behind its recent high of 725.60p.
Analysts currently have a consensus ‘Hold’ stance on the stock, while the Marketbeat community gives it a 54.27% ‘Underperform’ rating. Its p/e ratio is -3.45, its dividend yield stands at 6.96%.