21st Jun 2006 07:01
Great Portland Estates PLC21 June 2006 21 June 2006 Great Portland Estates forward sells Tooley Street development for £94.3 million Great Portland Estates plc ("GPE") announces it has agreed to forward sell itsproposed 200,000 sq ft office development at 154/172 Tooley Street, London, SE1to UBS Global Asset Management (UK) Ltd ("UBS") for £94.3 million. Purchased in four separate transactions from June to September 2004 for £20.0million including costs, the Group obtained a resolution to grant planningpermission for the site in November 2005 and completed a Section 106 agreementin March. Construction is scheduled to start later this year with completion ofthe development due in early 2008. UBS will pay £36.2 million for the site,generating a surplus for the Group of £7.7 million on the March 2006 book value.Of this, £33.8 million is payable in July 2006 with two further paymentstotaling £2.4 million to be paid over the next two years. Construction works will be completed by GPE under a development agreement, withall associated costs, estimated at £48.3 million, immediately reimbursed by thepurchaser. A construction profit estimated by the Group to be £9.8 million willbe paid by UBS on practical completion bringing total net proceeds (excludingreimbursed construction costs) to £46.0 million. This represents a surplus of£17.5 million to the March 2006 book value, equivalent to a post tax NAV upliftof 8 pence per share and a return on the Group's capital employed of 78%. Whilst construction cost risk remains with GPE, all other risks, including voidand letting risk have been transferred to the purchaser. A further profitpayment of up to £2 million is available to GPE subject to certain lettingtargets being achieved by UBS. Commenting on the transaction, Toby Courtauld, GPE's Chief Executive said, "Thisis further good business for GPE. Tooley Street is the single largest scheme inour remaining near term development programme of 575,000 sq ft and we have nowrealized our forecast profit, in an accelerated timeframe and at a much reducedrisk. Having recently made further acquisitions on Southbank at Blackfriars Roadand St Thomas Street, we look forward to developing our ideas on this nextpipeline of projects as well as delivering a first class product for UBS." Contacts: Great Portland Estates plc Toby Courtauld Chief Executive 020 7647 3042Robert Noel Property Director 020 7647 3043 Finsbury James Murgatroyd 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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