The headquarters of Coutts, the private bank for wealthy customers, on the Strand in London has been put up for sale as part of a £475m portfolio of properties occupied by Royal Bank of Scotland.
The portfolio, which comprises 55 properties let to RBS until 2037, is being sold by Telereal Trillium. the property company of the London-based Pears family.
The planned disposal will see Telereal become the first large property owner to explore the demand for real estate this year after the market staged a sharp recovery in the second half of 2009.
The sale is the majority of a portfolio of 63 properties acquired by Telereal in a £800m sale-and-leaseback in November 2007. Other properties include the Drummonds’ headquarters on Trafalgar Square and Child & Co headquarters on Fleet Street. More than 45 per cent of the income of the portfolio is generated by London properties.
CB Richard Ellis is to advise on the sale.
Graeme Hunter, property director, said: “We have had regular inquiries from many parties interested in acquiring single assets. Since the summer, however, the level of interest in a larger portfolio transaction has increased dramatically and as such we see the time as being right to test the market’s appetite.”
But it has not been as easy for the investment market as the recovery in values last year would suggest. It has emerged that the £110m sale of a luxury hotel development also on the Strand, which was in administration, received only one satisfactory bid above the minimum price.
The two other shortlisted bidders were unable to find funding, which meant that it was sold over Christmas to the only party left – a subsidiary of BBVA, the bank that pushed the property into administration. This was in spite of 140 expressions of interest, according to PwC, the administrator.
Even so, King Sturge, the property consultancy, on Tuesday forecast that 2010 would see the best returns for property investors for four years, although it warned that values could fall again in 2012.
King Sturge predicted 2010 will produce total returns of 12.8 per cent, but said that there was a possibility that this could be a “false dawn”.
The gap in values and occupier demand between London and the rest of the country is expected to widen, with the capital leading the office market recovery in 2010.
Shop rents are forecast to decline for another two years. Christmas was only a temporary respite for retailers, according to King Sturge, with underlying sales remaining fragile and erratic. Even so, it says vacancy rates will slowly recover from a near-20 per cent nadir this year.
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