Hines Buys Landmark City Building

LONDON-The disposal programme at the troubled Marylebone Warwick Balfour Group has continued with the £53.5 million ($83 million) sale of a long leasehold interest in the 130,000-sf Cannon Centre in Cannon Street, London EC4 to Hines Real Estate Holdings.

The sale takes MWB’s property disposals over the past few weeks to more than £80 million ($125 million) as part of its planned orderly liquidation of the portfolio over a five-year timeframe.

The 15-storey Cannon Centre, located beside and above Cannon Street rail station, currently generates £4 million ($6.2 million) per annum from tenants including the Mellon Bank, Prudential, Martineau Johnson and MWB Business Exchange. The site has planning consent for a 380,000-sf office redevelopment. As part of the deal, MWB will also receive a 17.5% share of any profits if the building is sold before the end of2006. But if the building is redeveloped then MWB will receive a 50% profit share after the developer’s 20% priority return.

MWB Chief Executive Richard Balfour-Lynn said: “Having acquired the Cannon Centre more than four years ago the excellent sale price reflects our ability to add value through an intensive asset management programme, while at the same time our ongoing profit share ensures that MWB’s shareholders participate in any future upside.”

BH2 acted for MWB in the sale.