Cityhold Office Partnership, a joint venture created by the merger of European office assets held by US financial services group TIAA-CREF and two of Sweden's AP national pension funds, has made its first add-on deal, at a sub-4% yield.
Cityhold Office Partnership, a joint venture created by the merger of European office assets held by US financial services group TIAA-CREF and two of Sweden's AP national pension funds, has made its first add-on deal, at a sub-4% yield.
UK listed property company Great Portland Estates sold the scheme at 60 Great Portland Street in London to Cityhold Office Properties for £102.15 mln (€140 mln), reflecting a net initial yield of 3.89%.
The price is in line with the September 2015 valuation and equates to a capital value of £1,300 per sq ft overall or £1,480 per sq ft on the office element.
The buyer is the Cityhold Office Partnership, a joint venture between the TIAA-CREF General Account and Swedish national pension buffer funds AP1 & AP2. The office venture is managed by Tiaa's TH Real Estate business.
60 Great Portland Street was refurbished and extended by GPE in 2007 to provide 65,400 sq ft (6,075 m2) of offices over ground to fifth floor and 11,100 sq ft of ground and basement retail space. The offices are let to The Engine Group Limited until 2028 and the retail space to F W Evans Cycles until 2024.
The sale also included 48/50 Mortimer Street and 1/3 Little Titchfield Street comprising two ground and basement retail units extending to 2,100 sq ft and a total of 17 apartments which are sold off on long-term occupational leases.
The full asset generates £4.20 mln of rents a yaer and has a weighted unexpired lease term of 11.8 years.
Toby Courtauld chief executive of GPE said, 'The sale of 60 Great Portland Street continues our disciplined and profitable recycling from mature assets back into our largest ever development programme which we expect to be a significant driver of future returns.'
Joint Venture
Back in August 2015 TIAA-CREF and AP1 and AP2 unveiled plans to build a €4 bn-plus pan-European office platform, dubbed Cityhold Office Properties.
The joint venture was seeded with €2.2 bn of core office space owned by TIAA General Account and AP1 and AP2. The initial 15-office portfolio comprised 250,000 m2 of core office space across the UK, France and Germany. TIAA-CREF provided nine properties, with the Swedish funds contributing the other six.
