Great Portland buys second half of estate from JV

Great Capital Partnerships, the 50/50 joint venture between Capital and Counties Properties and Great Portland Estates, has exchanged contracts to sell the other half of Jermyn Street Estate, in south west London, to Great Portland.

By MoneyWeek

published 23 July 2012

in Features

The firm will pay £60m to purchase the second half of the estate, which consists of five properties, each of which are held on separate 125 year headleases from The Crown Estate at a combined fixed headrent of £675,000 per annum until September 2014, after which they revert to 10% of rents received.

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The properties generate a current net rental income of around £4.5m after payment of the headrent and have an estimated net rental value today of £7.3m.

The sale reflects a net initial yield of 3.7% and net reversionary yield of 6.0% after the deduction of actual costs incurred in the transaction. The estate was sold at a 3.3% premium on the June 2012 valuation.

Toby Courtauld, Chief Executive of GPE said: "We are delighted to have bought the half of the Jermyn Street Estate we didn't already own. With our recent acquisition adjoining the properties, this gives us circa 185,000 sq. ft. of prime real estate with opportunities to grow income in the short term.

"In the longer term, the combined properties offer a superb development opportunity in one of the West End's premier sub markets, with the potential to deliver material uplift in both quality and quantity of accommodation on the site."

The share price fell 0.56% to 424.80p by 08:38.

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