LONDON (ShareCast) - (Sharecast News) - Derwent London has exchanged contracts to sell its 192,700 square foot freehold interest in the Johnson Building on Hatton Garden and St Cross Street in London, it announced on Thursday, to Eurazeo Patrimoine, the real assets division of Eurazeo.
The FTSE 250 company said the headline price was £170m before rental top-ups of £2.4m for incentives and vacant space.

It acquired the office and retail complex was acquired for £29m, and in 2006 it completed a "significant" refurbishment designed by architects AHMMm which increased the lettable area by 53%.

The total rent passing from the multi-let buildings was £7.3m per year, with about 40% of the income expiring in 2021.

Derwent said the sale price represented a net initial yield of 4.1% on the passing rent, which would fall to 2.5% allowing for 2021 lease expiries.

The disposal price, net of incentives, was 4% below the June book value before costs, with the directors saying that the sale crystallised an internal rate of return of 10% per annum to the group since acquisition.

"The refurbishment of the Johnson Building was one of our first generation of schemes and the sale continues our strategy of disposing of mature assets," said chief executive officer Paul Williams.

"The proceeds will be reinvested into new developments with superior growth prospects, such as 19-35 Baker Street W1 which is scheduled to start on site in 2021."

At 0924 GMT, shares in Derwent London were down 0.7% at 3,138p.

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