LONDON (Alliance News) - Great Portland Estates PLC on Friday said it has sold its Rathbone Square property, which is pre-let to Facebook for its London headquaters, for GBP435.0 million, and plans to return GBP110.0 million to shareholders through a special dividend.
The FTSE 250 property developer said it sold the freehold of Rathbone Square, located in London's West End to Rathbone Place Jersey Ltd, an entity owned by WestInvest Gesellschaft Fuer Investmentfonds mbH and Deka Immobilien Investment GmbH. The GBP435.0 million headline price reflects a net initial yield to the buyer of 4.25%.
The sales price represents a 4.0% discount to the September valuation, adjusted for subsequent capital expenditure, reducing its net asset value per share by 5.00 pence, and the sale should be "broadly neutral" to its EPRA earnings for the current financial year, Great Portland said.
Great Portland said it expects the sale to crystallise a whole-life capital return from the project of around GBP110.0 million, which it proposed to return to shareholders. This cash return would be accompanied by a share consolidation. Shareholder approval for this is expected to be sought in April, the group said.
The GBP435.0 million price is before deductions for Facebook tenant incentives, which include a 30-month rent free period and capital contributions of GBP12.3 million, resulting in a net purchase price payable to Great Portland of GBP374.8 million.
Great Portland said it will receive GBP211.9 million on completion of the Facebook leases in early April, a further GBP30.8 million on completion of retail units in late April, GBP16.6 million on completion of residential units and the central garden in summer and then GBP2.0 million will be paid 12 months after.
"Rathbone Square is our largest ever development scheme and this sale continues our successful strategy of recycling capital out of assets where we have created significant value," said CEO Toby Courtauld.
Following the sale Great Portland will have a proforma loan to value ratio of 7.3%, and after the capital return said gearing will remain low giving it "ample capacity for further investment both within our extensive 1.7 million square foot development pipeline and in new opportunities as we unearth them."
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
Copyright 2017 Alliance News Limited. All Rights Reserved.
