Frontier Estates has sold 37- 41 Old Queen Street, close to London’s St James’s Park, for £8.5m, just five months after acquiring the building for £7m.

Frontier has exchanged contracts for the freehold interest to be sold to the Republic of Chile with vacant possession in July 2009 for £8.5m.

The 15,000 sq ft nine-storey period building, which is located in the Birdcage Walk Conservation area close to Parliament Square and St James’s Park, is currently fully occupied but will become vacant in June 2009 in time for the Republic of Chile to take possession of the building for its new UK Embassy.

Frontier originally bought the building with 100% equity, from venture capital and fund management company Palmer Capital Partners, in July 2008 for £7m from Veolia Water. It was Frontier’s first foray in to the central London property market purchase.

‘We hope it will be the first of a few more deals in central London as we have got good sources of funding to buy more stuff,’ said James Good, director of Frontier Estates.

He added: ‘This was a bold acquisition at the time however the quality of the location and building together with the ability to offer vacant possession attracted a lot of interest.

'Our original business plan was to explore a residential conversion or office refurbishment however we could not ignore such a neat and profitable exit opportunity.’

Matthews & Goodman advised Frontier Estates; PSK Knighton advised the Republic of Chile.