GPE acquires major West End site

Existing plans for new retail, residential and office space to be revised

Article posted: 12 Sep 2011

Great Portland Estates has secured a coveted West End site fighting off strong competition from British Land, Development Securities and Land Securities, and will pay Royal Mail Group £120m in cash for their freehold interest in the property.

The deal involves the lease back of the entire site to RMG until June 2013, with GPE receiving total net rent of £4.6m. Vacant possession will be delivered to GPE at the end of the lease back whereupon GPE expects to commence a major mixed-use redevelopment.

In May 2011, RMG submitted a planning application for approximately 383,435 sq ft of net area including new residential and retail accommodation, substantial public realm improvements and the creation of new office space in Noho, with a new public street connecting Newman Street through to Rathbone Place and Charlotte Street (as pictured). Based upon this scheme, the price paid by GPE, excluding the leaseback rent, equates to a capital value of £313 per sq ft.

Immediately post completion, GPE will withdraw the current planning application and will begin work on a new proposal for the site, expecting to submit a new application during 2012.

Toby Courtauld, GPE Chief Executive said, “We are delighted to have added this important West End site to our medium term development pipeline. Its redevelopment will accelerate the regeneration of the East End of Oxford Street, one of London’s most exciting submarkets, which is set to benefit significantly from the opening of Crossrail. We look forward to working closely with both Royal Mail Group and Westminster City Council to maximise the benefit the site can bring to this part of the Capital.”

Meanwhile, today GPE has also announced the acquisition, in a joint venture with the BP Pension Fund, of office space in Midtown at 200 Gray's Inn Road, WC1.

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Posted by Sam