The largest of the three properties is 21 Moorfields in the City of London. The 151,000-sf of office space is let to Lazard Bros under a lease expiring in 2008 at a passing rent of £5.6 million ($9.4 million) per annum although the building is not currently occupied. In 2001, Hammerson obtained outline planning consent to redevelop the site with a new 430,000-sf office building. Under the terms of the sale contract, Hammerson has been retained as development manager and granted an option to participate in any redevelopment of the site.

The other two office buildings were acquired by Hammerson in 1999 as part of its acquisition of the Euston Square Estate, at the entrance to Euston Station in north London. Grant Thornton House provides 69,000 sf of offices and is leased to Grant Thornton while 40 Melton St. provides 116,000 sf of offices and is leased to Network Rail. The two buildings generate an aggregate rent of £5.6 million ($9.4 million) per annum.

The only building at Euston that Hammerson has retained is the 117,000-sf One Eversholt St., Euston Square which provides potential for Hammerson to be involved in any future redevelopment of Euston Station. The deal means that central London office investments now account for just 17% of Hammerson's total portfolio.

Hammerson chief executive John Richards says: "This sale will release resources for investment in other projects. The group has a substantial pipeline of future development opportunities both in the retail and office sectors."

Hammerson was advised by CB Richard Ellis and BH2.

Instant Insights /

Hammerson Sells Three London Office Investments in $205M Deal

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