Derwent London has sold the freehold interest in 132-142 Hampstead Road in London to the Secretary of State for Transport for £130m.
The 219,700 sq ft property is let to University College London at an annual rent of £1.7m, but will eventually be demolished to make way for HS2.
Derwent London acquired the property in 2007 and subsequently secured planning permission for its original White Collar Factory scheme – a 233,000 sq ft office and 38 residential unit development.
However, this was scuppered with the announcement of the arrival of HS2 and Derwent ended up letting the current warehouse-style buildings to the university.
The deal is one of several sales and lettings announced by Derwent London to coincide with publication of the firm’s annual results, which saw the company’s net asset value fall by 1.3%.
A UK subsidiary of Arup Group has agreed a pre-let on 133,600 sq ft at 80 Charlotte Street in London, to commence when development is completed in the second half of 2019.
Arup has agreed a 20-year lease on the first to third floors as well as part of the ground and lower ground floor space, at an annual rent of £75/sq ft on the main office floors.
Derwent London has also agreed a conditional put and call option to sell 8 Fitzroy Street in London to Arup for £197m.
Arup currently occupies the entire 147,900 sq ft building on a lease expiring in 2033. The deal is expected to be completed on 23 June 2017.
John Burns, chief executive at Derwent London, said: “This complex transaction further de-risks Derwent London’s development programme, and is evidence of our asset management and letting skills, the desirability of our product and the advantage of owning a cluster of property in an attractive location.”
Expedia currently occupies 93,400 sq ft and has agreed to take on two other leases from 2020, expanding its presence at the building to 231,400 sq ft until 2030.
JLL, Pilcher Hershman and CBRE acted for Derwent London. Strutt & Parker acted for Arup.
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