TIDMLAND
RNS Number : 1781A
Land Securities Group PLC
21 September 2022
21 September 2022
Land Securities Group PLC ("Landsec")
Landsec and Lendlease exchange contracts on 21 Moorfields for
GBP809m
Landsec announces that it has exchanged contracts for the sale
of 21 Moorfields, EC2 to an investment vehicle managed by global
real estate and investments group, Lendlease (ASX:LLC) . The total
consideration for the sale amounts to GBP809m, which, after
outstanding development-related items results in a net cash receipt
to Landsec of GBP733m. Rothesay is providing financing for the
acquisition with a 10 year senior term loan.
21 Moorfields is a premium 568,500 sq ft London office
development fully pre-let to Deutsche Bank AG (DB) on a 25 year
lease, with an annualised net rent of GBP38m. Built directly above
Moorgate station, the asset is targeting sustainability ratings of
BREEAM Excellent and LEED v3 Gold.
Landsec will retain the responsibility for completing the
development, with practical completion expected in Q1 2023.
Lendlease will manage the investment vehicle , on behalf of its
investment partners including Australia's TCorp and its own
minority interest.
The total consideration of the disposal represents an effective
9% discount to the March 2022 value, yet crystallises an
anticipated development profit of GBP 145m, representing 25% profit
on cost. The sale is in line with Landsec's strategy to recycle
capital out of mature London offices and reduces the company's loan
to value from 34% to 30% based on a pro-forma March 2022 balance
sheet, further strengthening its strong financial base. Following
its strategic review in late 2020, Landsec has now sold GBP1.8bn of
London offices at an average yield of 4.35%.
Completion of the transaction is expected to take place in the
coming week and the net proceeds of the disposal will initially be
used to pay down debt. Landsec's low financial leverage post the
sale of this profitable development provides the company with
significant flexibility to invest in future opportunities with a
higher forward return. The company maintains its guidance on
earnings growth provided in the full year results statement in
May.
Marcus Geddes, Managing Director, Central London at Landsec said
: "21 Moorfields is a fantastic example of Landsec's development
expertise in delivering a high-quality project at one of the most
complex construction sites in London. We are particularly proud to
have achieved a number of engineering firsts associated with the
development of such a significant building which sits directly
above both Moorgate Underground Station and the new Crossrail line
to Liverpool Street.
"These achievements, combined with the securing of a 25-year
pre-let agreement with Deutsche Bank, has culminated in substantial
grade A office space with long-term income, the value from which we
can now unlock in order to recycle capital into new opportunities,
in line with our growth strategy."
Neil Martin, Chief Executive Office, Europe, Lendlease said :
"The scale of this joint investment in the City of London reflects
the global appetite for premium and sustainable office assets in
the world's key gateway cities. In addition to our close
partnerships with international capital, Lendlease also brings our
global expertise in funds and asset management to this deal at 21
Moorfields.
"This significant acquisition adds size and weight to our
European investments platform and contributes to our global funds
under management target of AU$70 billion by FY26. In addition to
converting our AU$117 billion development pipeline, our team will
continue to scope on-market opportunities across Europe as we seek
to add further scale to our investments platform in the
region."
Stewart Brentnall, Chief Investment Officer at TCorp (NSW
Treasury Corporation) said : "TCorp has been actively pursuing
direct property investment opportunities across Europe and is
pleased to expand its relationship with Lendlease by partnering in
the landmark 21 Moorfields opportunity. This strategic initiative
contributes return, diversity and sustainability to our global real
estate exposures. This is TCorp's first direct investment into the
London Office market and our second UK transaction after acquiring
a large scale, high quality logistics asset earlier this year."
Harish Haridas, Head of Commercial Real Estate Debt at Rothesay,
said: "We are delighted to support the acquisition of this unique
new addition to the City of London's premium office stock. These
types of high quality, secured commercial real estate loans are
attractive to us and play an important part in our investment
portfolio, providing long-term security for the pensions we
protect."
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 GBP12 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 www.landsec.com
About Lendlease
Lendlease is a globally integrated real estate and investments
group with core expertise in shaping cities and creating strong and
connected communities. Founded in 1958, we're listed on the ASX and
operate across Australia, Europe, Asia and the Americas.
We manage funds and assets for some of the world's largest real
estate investors. We also have a strong track record in creating
award winning urban precincts where communities thrive, and
delivering essential civic and social infrastructure.
Learn more at www.lendlease.com/europe
About TCorp
TCorp is the financial services partner to the NSW public
sector, providing best-in-class investment management, financial
management solutions and advice. With $100.7bn of assets under
management, TCorp is a top 10 Australian investment manager and is
the central borrowing authority of the state of NSW, with a balance
sheet of $124.3bn.
About Rothesay
Rothesay is the UK's largest pensions insurance specialist,
purpose-built to protect pension schemes and their members'
pensions. With over GBP50 billion of assets under management, we
secure the pensions of more than 810,000 people and pay out, on
average, approximately GBP200 million in pension payments each
month.
Rothesay is dedicated to providing excellence in customer
service alongside prudent underwriting, a conservative investment
strategy and the careful management of risk. We are trusted by the
pension schemes of some of the UK's best known companies to provide
pension solutions, including Asda, British Airways, Cadbury's, the
Civil Aviation Authority, National Grid, the Post Office and
telent.
Rothesay has two substantial institutional shareholders, GIC and
Massachusetts Mutual Life Insurance Company ("MassMutual"), who
provide the company with long-term support for its growth and
development. In September 2020, our shareholders increased their
investment in Rothesay through a transaction which valued the
business at GBP5.75bn at that time.
Rothesay refers to Rothesay Limited and its subsidiaries and is
the trading name for Rothesay Life Plc, an insurance company
authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation
Authority. Firm Reference Number: 466067. Rothesay Life Plc is
registered in England and Wales with company registration number:
06127279 and registered address: Rothesay Life Plc, The Post
Building, 100 Museum Street, London WC1A 1PB. Further information
is available at www.rothesay.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
Rothesay: Anthony Marlowe, Head of Communications & Public
Affairs
+44 (0)7912 550184 or anthony.marlowe@rothesay.com
Lendlease: Thomas Dearnley-Davison, Senior Communications
Manager
+ 44 (0) 7889 594 165 or
Thomas.DearnleyDavison@lendlease.com
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END
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