Landsec, the FTSE 100 property group, has agreed the unconditional sale of its 123 Victoria Street office block in London for £211 million.
The buyer is SevenCitiesLdn, acting on behalf of Seven Capital.
The 245,000 square foot building dates from the 1970s and was last refurbished in 2012.
Landsec said the rental income it gives up equates to a yield of 6% over the next five years, once upcoming lease events are taken into account.
It will receive £181 million when the sale completes next month, with the remaining £30 million due within three years.
That balance will earn 6% annual interest, above Landsec's marginal cost of borrowing.
Recycling capital
In early 2025, Landsec set out plans to release £2 billion from offices by 2030 and reinvest it in assets offering stronger income growth.
It has sold more than £550 million of offices since then and says it remains on track.
Total asset sales since the strategy update now stand at £1 billion.
The disposal trims net tangible assets per share, a measure of the portfolio's underlying value, by 0.3%.
The initial proceeds will cut loan to value, the ratio of debt to property value, by 0.9 percentage points from 38.7% at March.
Net debt will fall to 8.1 times earnings before interest, tax, depreciation and amortisation (EBITDA), from 8.4 times, on a pro forma basis.
Chief executive Mark Allan said the sale was "firmly supportive" of the group's aim to deliver sustainable growth in income and earnings per share.
He added that strong demand for its best assets was driving continued like-for-like income growth.
