The sale price, reflecting an initial yield of 12%, on a head lease with 26 years remaining, is 8% below the last valuation carried out in March 2009. The net proceeds will be used to reduce bank loans and gearing.

Gerald Kaye, Director, said: “Following the acquisition of Rex House in 2000, and its subsequent redevelopment for a combined cost of £22 mln., we have enjoyed substantial rental cash flows. Our leasehold interest was declining in value as the unexpired term reduced and we are pleased to have sold this interest to the freeholder.”

James Cooksey, The Crown Estate, said: “We are delighted to have made this acquisition which reinforces our stated strategy of focusing on our core holdings, The St James Estate and Regent Street Portfolio’s. The investment generates an attractive income return following a period of successful lettings by Helical Bar PLC”.

Agents acting for The Crown Estate: BH2.

Source: FD