WPP’s Home at Dorland House and Louboutin’s St James’s Home Selling
M&G Real Estate is in the final stages of selling two offices for close to £125 million, in an early-year filip for London’s prime West End investment market.
The M&G Secured Property Income Fund is under offer to sell advertising giant WPP’s offices at Dorland House in Paddington, West London, for a figure believed to be in excess of £80 million. Market sources said Tokoro Capital, an independent investment manager focused on the UK and Europe, is the purchaser.
CBRE is advising on the Dorland House sale process, with the initial price sought of £85 million reflecting a 4.55% net initial yield.
The 85,457-square-foot office is on Westbourne Terrace less than 200 yards from Paddington station. It is single-let to WPP until 2035 at a rent of £48.35 per square foot, and part of it was sublet to Future Publishing in 2021. The building has significant alternative use value, underpinned by a longer-term potential for residential, hotel or health.
M&G restricted institutional investor redemptions from the £4.6 billion Property Income Fund on 3 November, and the restriction is still in force.
The move followed Schroders and BlackRock, along with Columbia Threadneedle, which imposed redemption limits on some property funds open to institutional investors.
The M&G Secured Property Income Fund invests in UK real estate for pension funds seeking long-term returns that are linked to inflation.
Separately, M&G Investments has sold Byron House, 7-9 St James’s Street to Unity Real Estate for a price understood to be close to £45 million.
Market sources said Unity is acting for Dao Capital, a privately owned company based in London and focused on shipping and a growing property business. No advisers were involved in the transaction. Byron House is a multilet 33,000-square-foot office.
M&G Investments leased the refurbished third and fourth floors, of 4,300 square feet each, last year to luxury French brand Christian Louboutin and financial consultant Smith Square Partners. The floors were let on five-year leases.
The sales come after M&G’s Life fund sold Globe House, 89 Eccleston Square in London to Criterion Capital for £40 million in November.
The 68,686-square-foot office is arranged over 11 storeys (basement, ground, mezzanine and eight upper floors). The property is occupied and operated as the HM Passport Office.
M&G declined to comment.