Landsec Sells 21 Moorfields Office Tower To Lendlease For £809mil

UNITED KINGDOM – Land Securities Group (Landsec) has signed a deal to sell 21 Moorfields, an under-construction office project in London, to an investment vehicle overseen by Lendlease for £809 million (S$1.27 billion), according to a press release published on Wednesday evening (21 September, SGT).

While the selling price is 9 percent lower than the office property’s March valuation, it will generate £145 million of development profit for Landsec. The funding for the commercial property is being provided by Rothesay via a 10-year senior term loan.

Notably, Deutsche Bank AG has agreed to pre-let 21 Moorfields, an office project spanning 568,500 sq ft, for 25 years. The multinational bank will be paying £38 million office rent per year after Landsec completes the commercial property by Q1 2023.

Thereafter, Lendlease will manage the investment vehicle, on behalf of its investment partners that include Australia’s TCorp and Lendlease’s own minority stake.

Located above the Moorgate station, the office development targets sustainability ratings of LEED v3 Gold and BREEAM Excellent.

The country’s commercial property market is in flux as rising interest rates reduce the spread between government bonds and prime property yields. But new commercial buildings with top eco-friendly credentials and long index-linked leases have outperformed other real estate types as investors seek a sanctuary from rising inflation.

“The scale of this joint investment in the City of London reflects the global appetite for premium and sustainable office assets in the world’s key gateway cities. In addition to our close partnerships with international capital, Lendlease also brings our global expertise in funds and asset management to this deal at 21 Moorfields,” said Neil Martin, CEO for Europe at Lendlease.

The acquisition is expected to be completed next week and the proceeds will be used by Landsec to pay down debt.