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(Sharecast News) - Property development and investment firm Landsec said on Monday that it has exchanged contracts for the unconditional sale of 123 Victoria Street in Westminster to SevenCitiesLdn, acting for Seven Capital, for £211m.
Landsec stated that of the total consideration, £181m will be received on completion in October, with the remaining £30m payable within 36 months. Landsec will earn 6% interest per year on the deferred amount, ahead of its marginal cost of borrowing.
The FTSE 100-listed firm noted that the 245,000 square foot office block, built in the 1970s and last refurbished in 2012, carries an estimated foregone net rental income yield of 6% over the next five years, reflecting upcoming lease events.
Landsec said the disposal formed part of its strategy, set out in early 2025, to release £2bn of capital from offices by 2030 and reinvest into assets capable of delivering stronger income growth. Since outlining that ambition, the group has sold more than £550m of offices and remains on track against its target.
On a proforma basis, the initial proceeds would reduce the group's March 2026 loantovalue ratio from 38.7% to 37.8%, and cut its net debt-to-underlying earnings rato from 8.4x to 8.1x. The sale will also trim Landsec's net tangible assets per share by 0.3%.
Chief executive Mark Allan said: "Our primary financial objective is to deliver sustainable growth in income and EPS and the sale of 123 Victoria Street is firmly supportive of that.
"Since the start of the year we have continued to see strong customer demand for our best-in-class assets, which is translating into continued like for like income growth. This strong occupational market backdrop and continued progress on asset recycling, coupled with our sector-leading debt maturity profile and highly efficient cost base, means we remain well placed to deliver on the acceleration in EPS growth we set out at our full year results in May."
As of 0900 BST, Landsec shares were up 1.46% at 627p.
Reporting by Iain Gilbert at Sharecast.com
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