(Adds CEO, analyst, property consultant comments)
By Esha Vaish and Noor Zainab Hussain
Feb 10 (Reuters) - Great Portland has agreed tosell Rathbone Square, a mixed-use development that housesFacebook's new London headquarters, to German rival WestInvestGesellschaft and asset manager Deka Immobilien for 435 millionpounds ($542 million).
The sale is at a 4 percent discount to the asset's Septembervaluation.
Although Britain's property investment market has been moreresilient than expected as the pound's slide has attractedoverseas investors, analysts have warned values could fall thisyear due to uncertainty over Britain's exit from the EU. Investors have managed to secure about a 3 percent discounton offer prices on the 8 billion pounds of UK commercialproperty sold since the June vote, according to commercial realestate company Cushman & Wakefield.
Great Portland Chief Executive Toby Courtauld told analyststhe deals market for larger properties was less liquid, withbuyers asking for lower prices given the higher risk in thecurrent market.
"(For large projects), there aren't as many buyers around.That's what we've felt. It's a scale thing in a world withslightly less uncertainty," he said.
Great Portland had to offer a discount on Rathbone Square,its largest development scheme ever, despite about 57 percent ofthe development having been rented by Facebook, raisingconcerns that the rest of its portfolio could see a negativere-evaluation.
"The pricing of the asset with an uber prime covenant ofFacebook... is disappointing," Jefferies analysts wrote. "Itdoesn't give the bulls the excuse that Brexit was just a passingstorm...and everything in the garden is rosy."
In November, Great Portland, whose portfolio is dominated byoffices, cut its full-year rental growthforecast.
The company said it expected to remain a net seller ofproperty this year and would return any surplus cash if it didnot find investment opportunities for about 600 million poundsit would have after the deal closed.
Courtauld told analysts Great Portland had backed out ofsome potential purchases as the "pricing didn't work".
It intends to return about 110 million pounds to investorsvia a special dividend and undertake a share consolidation.($1 = 0.8026 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing bySunil Nair and Susan Thomas)
