Derwent London Agrees £132M Sale Of Burberry Headquarters
Derwent London has exchanged contracts for the disposal of Horseferry House SW1 for £131.8M to an unnamed overseas investor. The deal is scheduled to complete in June and is part of a wider plan for £1B in disposals.
Derwent acquired the 165K SF Horseferry House in 2005 for £34M and subsequently completed a substantial refurbishment, during which time it was pre-let to British fashion brand Burberry as its global headquarters.
Burberry’s lease was regeared in December to extend the term by five years to 2043 with no breaks and incorporate two new five-yearly fixed uplifts in 2033 and 2038. The sale price is marginally below the December book value, Derwent said.
The sale secured Derwent an 8.4% internal rate of return over its 21-year hold, which the firm said outperformed the MSCI Central London Office Index by 240 basis points a year.
Derwent has exchanged contracts on £275M of sales since the start of the year and has another £100M in negotiations, CEO Paul Williams said in a press release.
Two major dispositions were announced in February. An agreement to sell 90 Whitfield Street W1 to Lone Star Real Estate for £110.5M is scheduled to complete in August. The 104K SF Fitzrovia freehold property was developed in 2007.
A joint venture between Purestone Capital and BPS London is purchasing 80-85 Tottenham Court Road W1 for £32.6M, scheduled to complete in June. The freehold property comprises 28K SF of offices across six floors plus four ground-floor retail units, with a total floor space of 43K SF.
In March, Derwent London also confirmed it had pre-let the entire 136K SF office space at Network W1 to Databricks, a data and artificial intelligence company, on a 15-year lease with a break at Year 10. The annual rent is £14.1M.
