Great Portland Estates (LSE:GPOR) PLC has sold a freehold City of London property for £190mln to a German investor, its first net-zero-carbon development.
Contracts have been exchanged for the freehold of 50 Finsbury Square to a subsidiary of German family office Wirtgen Invest with the price reflecting a net initial yield of 3.85% and capital value of £1,471 per sq ft – or £1,690 per sq ft on expiry of rent-free periods.
The sale price is broadly in line with the 121,800 sq ft property’s March 2022 book value after adjusting for the estimated capital expenditure to complete the "comprehensive refurbishment" currently underway.
It expects to complete the sale once leases of the office and retail space are tied up in the first quarter of 2023, with satellite group Inmarsat Global taking the entire office space and the eighth-floor roof terrace, while half of the four retail units on Finsbury Pavement have been pre-let and the remaining two are under offer.
“Sustainability and wellbeing have been at the heart of the refurbishment,” the company said, with the building to be rated BREEAM 'Excellent', with power coming only by electricity with no fossil fuel-based hot water or heating.
Originally designed by Foster & Partners and built in 2000, the Finsbury Square property was the first development to contribute to GPE's decarbonisation fund, with a carbon price of £95 per tonne to offset its residual embodied carbon.