Stenprop sells Euston House – Stenprop has reached agreement to sell of its London office building known as Euston House. The deal is being structured as a sale of all the shares of a special purpose vehicle owned by Stenprop to Erel 4 S.a.r.l. The deal values the property at £95m (£14.5m more than book value) and releases cash proceeds of approximately £66m (after sales costs, rental top-ups and the repayment of external debt). The buyer is a wholly owned subsidiary of Eurazeo, an investment management business listed on NYSE Euronext Paris, in partnership with investment and asset management business, Arax Properties.
Paul Arenson, CEO of Stenprop, said: “The sale of Euston House is the last of our Central London offices to be sold and completes a sales programme of more than GBP216.6 million of Central London offices. The net proceeds will be used partly to reduce debt and partly to acquire additional multi-let industrial assets in line with our transition strategy into a 100% UK multi-let industrial business. Following completion of the sale and before any further multi-let industrial acquisitions, the multi-let industrial component of our portfolio will represent more than 40% of our total assets and our overall debt will reduce to a loan-to-value ratio of less than 45%. This sale represents another important step in the implementation of our two-year strategic transition plan communicated to shareholders, which envisages being at 65% multi-let industrial by 31 March 2020 with no more than 40% overall leverage“.
Following completion of the disposal, and assuming no further acquisitions, multi-let industrial assets will increase from 34% to over 40% of Stenprop’s total portfolio, with 54.7% of the total portfolio located in the UK, 42.5% in Germany and 2.8% in Switzerland. Total leverage will reduce from approximately 48% to under 45%.
About the property
1 Euston House is a an office in central London with 112,597 square feet of net lettable space. The weighted average annual rental per square foot is £39.80. Euston House was built in 1934 as the headquarters of the London, Midland and Scottish Railway. It later became the headquarters of the British Railways Board.
STP : Stenprop sells Euston House