REG - Land Sec. Group PLC - Landsec sells One New Street Square

Land SecuritiesAnnouncement

27/01/2023 12:00

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RNS Number : 1365O  Land Securities Group PLC  27 January 2023

LAND SECURITIES GROUP PLC ("Landsec")

 

Landsec sells One New Street Square for £349.5m

 

Landsec announces that it has exchanged contracts for and completed on the
sale of One New Street Square, EC4 to Chinachem Group, a property developer
based in Hong Kong with a real estate portfolio of 8.4m sq ft valued at
US$13.7bn.

 

The total consideration for the sale amounts to £349.5m. The sale price
compares to a September 2022 valuation of £362.8m and crystallises a total
return on capital averaging 10% per annum since Landsec's acquisition of the
site in June 2005 and subsequent redevelopment in 2016.

 

One New Street Square is fully let to Deloitte, with a 14-year unexpired lease
term remaining and a current annual net rent of £16.8m. With limited
opportunities to add further value, the disposal is in line with Landsec's
strategy to recycle capital out of mature London offices.

 

With its strategic review in late 2020, Landsec announced its intention to
sell c. £2.5bn of mature London offices over the medium term. With the
inclusion of 1 New Street Square, the company has now sold £2.1bn of offices,
representing an average yield of 4.4%.

 

The disposal proceeds will initially be used to repay debt and, on a pro-forma
basis, would reduce Landsec's LTV from 31.1% to 28.9% based on September 2022
valuations. Its strong balance sheet provides Landsec with significant
optionality for future reinvestment in higher-return opportunities which are
expected to emerge as markets continue to adjust to a new reality.

 

Marcus Geddes, Managing Director, Central London at Landsec said: "One New
Street Square is a premium 276,502 sq ft London BREEAM 'Outstanding' office
development, which was completed in 2016 and fully let to Deloitte during
construction on a 20-year lease. This represents a clear demonstration of our
strategy in action and our strong customer relationships. Through this sale we
have been able to unlock capital at a rate that has provided strong returns
over our 18 years of ownership. Crystallising these returns enables us to turn
towards future opportunities and future growth through balance sheet strength
and flexibility."

 

Donald Choi, Executive Director and CEO of Chinachem Group, said: "We're
delighted to have acquired One New Street Square successfully as it is located
in the strategic Central London area with best-in-class building
specifications and attractive returns. This is an important step forward for
the Group and we intend to hold this property for long-term investment."

 

He added: "While Hong Kong will remain our home and core market, we intend to
incrementally increase the Group's exposure in gateway cities of major
developed markets, so as to fulfil our business diversification objectives and
build a resilient, long-term income stream."

 

Knight Frank advised Landsec, and Savills advised Chinachem Group.

 

Ends

 

 

 
About Landsec

 

At Landsec, we build and invest in buildings, spaces and partnerships to
create sustainable places, connect communities and realise potential.  We are
one of the largest real estate companies in Europe, with a £10.9 billion
portfolio of retail, leisure, workspace and residential hubs. Landsec is
shaping a better future by leading our industry on environmental and social
sustainability while delivering value for our shareholders, great experiences
for our guests and positive change for our communities.

 

Find out more at landsec.com

 

 Please contact:
 Press                     Investors
 Sara Doggett              Edward Thacker
 +44 (0)7834 431258        +44 (0) 7887 825869
 sara.doggett@landsec.com  edward.thacker@landsec.com

 

About Chinachem Group

Since 1960, Chinachem Group has been a leading property developer in Hong
Kong, with a portfolio covering residential, commercial, retail and industrial
buildings for sales and investment, in addition to operating hotels, property
management as well as healthcare and elderly services. The Group actively
seeks to make a positive contribution to society through its adherence to the
"Triple Bottom Line", a commitment that its activities will benefit People,
bring Prosperity to the community and preserve the Planet. Please visit
www.chinachemgroup.com/en
(https://urldefense.proofpoint.com/v2/url?u=http-3A__www.chinachemgroup.com_en&d=DwMFAg&c=bKNseOHsszsRCtLFfd6XtA&r=q8PT1YtRdgOEsR60VEsbpUr1T502F6b8X-KZZeB3-34&m=oO4kGj5O0SQSZd72fsri2Giqxa4sPYEreMd-0VjG-i7HNAMYYAumJXMheCr5-75q&s=fK0Apymw4YbGDvE1n_ibbz4Av3Y7wXi2Imc-NQagR_g&e=)

 

 

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