British Land is carrying out the first-ever building sale at its £3.44bn Broadgate estate in the City of London.
The company has appointed DTZ to begin marketing this week of the European Bank for Reconstruction and Development’s office headquarters with an asking price of £387m and a net initial yield of 4.8%.
The 385,000 sq ft (35,770 sq m) building, formerly known as 175 Bishopsgate but now called 1 Exchange Square, is let at £52/sq ft (£559.73/sq m) for a further 15.75 years. British Land’s co-head of asset management Tim Roberts said the marketing would be ‘low key’ and targeted at institutional investors.
The sale is part of a new strategy instigated by chief executive Stephen Hester of recycling capital and selling assets with little asset management potential – in the last two years he has bought and sold £7bn of properties.
The EBRD building was chosen as the first to be sold at Broadgate because it has the longest lease and no opportunity for asset management. It will appeal to investors who want to tuck away a prime City office building, let to a company with a AAA-rated credit rating.