Land Secs gets advance on Mayfair

17th Jun 2010 07:41

Property giant Land Securities has sold an unfinished development in London's West End for £250m plus construction costs.The company has agreed to forward sell its proposed 310,000 square feet retail, office and residential development at Park House, 453/497 Oxford Street, London, W1 to Barwa Real Estate.Construction of the scheme started on site in May 2010, with completion of the development due in November 2012. Barwa will pay £250m for the site, all of the construction costs and a profit share on completion. The profit share element is capped at £50m but based on current expectations as to office and retail rental values is expected to generate around £33m a year for Land Securities.Of the £250m site price, £225m will be paid immediately and £25m will be paid on practical completion.Land Securities will act as development manager responsible for delivery of the project."Park House is the largest speculative development in Mayfair for a generation and this sale enables us to realise the majority of our profit ahead of schedule, with significantly reduced risk and with no capital employed. We will recycle the capital to invest into our growing speculative development pipeline targeting the further return opportunities offered to our shareholders through early delivery into a forecast supply constrained market," said Robert Noel, Managing Director of Land Securities' London Portfolio.