Landsec is in talks to sell Red Lion Court, a £335 million London office development, to alternative asset manager Cheyne Capital Management and seasoned London developer Stanhope as part of its plan to dispose of £2 billion worth of offices and pivot further into retail and housing.
According to Bloomberg and sources close to negotiations that it said cannot be named, Landsec is finalising talks to sell the Southwark property with the land valued at around £45 million. Landsec gained consent in 2023 to redevelop Red Lion Court into a 230,000-square-foot office with retail and open areas with a gross development value of £335 million.
In full year results published in May, Landsec said it was accelerating its shift away from offices towards retail and residential, pledging to recycle £2 billion of capital in the former over the next two to five years into the latter.
Landsec said it would increase investment in major retail by another £1 billion and establish a £2 billion-plus residential platform by 2030, to be funded by rotating £3 billion of capital out of offices, non-core investments and low or non-yielding pre-development assets. The group will not start any more speculative office development until its two major under-construction projects in London at Thirty High and Timber Square are substantially leased.
In March, CoStar News revealed that Landsec was reviewing whether it would bring in an investment partner for a £250 million office tower development on the site of the nine-storey Hill House building off Shoe Lane in the City of London, as part of its pivot towards building its residential platform. The real estate investment trust gained consent in April last year for the 20-storey mixed-use office building.
Landsec said in a statement: "Earlier this year, we set out a new strategic focus for the business which will guide our approach for the next five years. This will involve releasing capital from some of our non-yielding pre-development assets - including office development sites and strategic land sites - as well as continuing to recycle capital out of our subscale retail portfolio. We are reviewing our portfolio and the market to determine the best opportunities to create capacity to grow our residential platform, but won’t comment on market speculation while this process is ongoing."
Cheyne Capital declined to comment. Stanhope did not comment.