St Martins pays £400m for City of London office development

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by Lin Freestone

British Land has exchanged contracts with international property investment and development company, St Martins, for the iconic Willis Building, at 51 Lime Street and 25 Fenchurch Avenue, in the City of London.

The sale for £400m is due to complete in June and is one of the biggest property deals since the start of the credit crunch.

Developed by British Land and designed by Foster & Partners, the Willis Building is located in the centre of the City opposite the Lloyd’s building.

The property totals 496,000 sq ft in two adjoining freehold buildings of 10 and 28 storeys, and includes four retail units.

The offices are let in their entirety to insurance broker, the Willis Group, on 25-year leases from 2007 and recently became their new European headquarters.

St Martins is the property investment arm of the Kuwait Investment Authority, the country’s sovereign wealth fund.

It has an appetite for landmark buildings and this was a rare opportunity to secure one of London’s finest.

St Martins believes it is a great investment, offering a guaranteed income stream and long-term value.

It also complements the assets it is seeking to acquire in the emerging markets, and anticipates that this will be the start of a very active period of investment over the next two years.

St Martins’ London portfolio includes London Bridge City, 150 Cheapside, 5 Cheapside, 2 Gresham Street, 16 St. Martin’s le Grand, Adelaide House and Chambers Wharf.

It is understood that British Land agreed to pay St Martins £60m to secure the deal, a figure equivalent to the rent-free period negotiated with Willis when it agreed to occupy the building.