Schroders Capital’s real estate team completes London Government office sale

Schroders Capital’s real estate team, acting on behalf of Greater Manchester Pension Fund (GMPF), has completed the sale of 3-8 Whitehall Place in London to Legal and General for £155.25 million, reflecting a yield of 3.5% and a capital value of £1,630 per sq ft.

3-8 Whitehall Place is a 95,000 sq ft office, which is fully let to the UK Government until June 2029. The UK Government currently pays a rent of £5.8 million per annum, reflecting an average rent of £61 per sq ft.

It has been announced that the Department for Business, Energy and Industrial Strategy will move into the building following a refurbishment programme of the asset due to complete in 2023.

Philip Scott, Portfolio Manager at Schroders Capital said:

“With this sale, we have successfully completed the business plan for our new client, GMPF. The sale capitalises on the strong current demand for government-backed income in key locations. We will now look to opportunistically reinvest the proceeds into higher yielding assets offering the potential to deliver attractive returns from our active asset management.”

Neil Dovey, Head of Annuity Transactions at Legal and General said:

“We are delighted to add such a strategic Government building to our portfolio, which further cements our wider relationship with the Government and our existing portfolio of other Government buildings in London as well as within all major regional cities – the majority of which we have funded as new developments.”

CBRE and DLA Piper acted for GMPF.

Cushman and Wakefield and Clifford Chance acted for the purchaser.