Great Portland Estates has agreed a deal with Prudential to acquire 90 Queen Street in the City of London.
The property group will pay £45.8 million for the complex, which houses the 68,400 sq ft office and retail space.
Currently, the building is occupied by Brazilian bank Intesa Sanpaulo SPA, which has signed a lease to remain there until 2017, with a tenant break scheduled for 2013.
The retail facet of the complex is currently leased to Lloyds Banking Group, Pret a Manger and Hugo Boss.
Ben Chambers, investment director at Great Portland Estates, commented: “The property sits in a prime location, is easily and quickly capable of being returned to market should the tenant break, and gives us a high running yield in the meantime.
“The break will come at a time when we forecast limited supply in the City market and, at a capital value per sq. ft. for the office component of £565, we are buying land and a building at beneath replacement cost, without the development risk and with an attractive income return.”
Rental income on the building is £3.9 million per year, which Great Portland Estates forecasts will add around one per cent to group earnings per share.
Tags: city of london, london offices, Office Space