McKay Securities has sold One Old Queen Street near London’s Parliament Square to a private investor £17.5m.

The property, sold at a net initial yield of 5.75%, had interest from 30 parties.

It is understood the asset was popular among buyers because the new build 21,800 sq ft office is let to the government until 2025. The lease has a tenant break in 2020.

The rent is £52.50/sq ft, totaling more than £1m a year in rental income.

McKay, a real estate investment trust (REIT) which focuses on development in London and the south east, bought the site in 2001 and speculatively redeveloped it in 2005.

The company said it has made a £3.5m profit on the scheme representing a 26% return on cost.

Simon Perkins, managing director of McKay, said: ‘The value released by the sale proceeds will be recycled into new opportunities tax free due to our REIT status, and used to reduce borrowings in the meantime.’