PNB mulls £550m London sell off as £10bn of London stock comes to market

By James Buckley - Thursday, September 21, 2017 8:41

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Malaysia’s largest asset manager Permodalan Nasional Bhd (PNB) is mulling a sale of two of its London office assets for £550m as close to £10bn of central London office stock is prepared for sale, CoStar News can reveal.

PNB has invited agents to pitch to devise a strategy for the assets: Milton & Shire House in the City and 90 High Holborn in Midtown, which will result in one of three options being implemented; sell the buildings, refurbish them or hold the assets and continue to actively manage them.

If a sale is sought, it is thought that the 453,474 sq ft Milton & Shire House, which is let for a further nine years to Linklaters, could fetch a price of just over £360m, reflecting a yield of 5.2%. The building at 1 Silk Street produces an income of £18m per annum.

Ninety High Holborn, a 217,654 office building, is expected to be sold for £190m, reflecting a 4.75% yield, or £1,000 per sq ft. The building has five years of income but comes with some vacancy given the departure of one of its tenants, Olswang.

In 2014, PNB bought three office buildings in London – Milton & Shire House (£350m), 1 Exchange Square (£410m) and 90 High Holborn (£140m). PNB also has a 40% stake in the Battersea Power Station development.

Its other major asset, Aviation House, is not currently being considered for sale.

The news comes as an almost unprecedented amount of London office assets come to market, with around £10bn of properties valued individually at over £100m either currently being marketed or in the process of being put up for sale. Of that, 19 assets are valued at over £200m and 11 are valued at £400m or above.

jbuckley@costar.co.uk

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