Landsec is eyeing a sale of 55 Old Broad Street, a £600 million development site in the City of London, as part of its plan to dispose of £2 billion worth of offices and pivot into retail and housing.
Market sources said Newmark and Knight Frank have been appointed to handle the sale, with Landsec understood to be looking to bring in a 50:50 investment partner.
Landsec gained consent for its plans for the development site close to Liverpool Street station in 2023. The Fletcher Priest-designed plans comprise a 23-storey tower with 360,000 square feet of offices and 3,500 square feet of retail on the site of 55 and 65 Old Broad Street. The company bought the site in 2020 for £85 million and submitted the plans, which expand development at the site from around 100,000 square feet, in June 2023.
The office element proposes new low-carbon workspace, designed and constructed using sustainable methods, including retaining some of the existing building, and reusing on-site materials where possible. The plans retain the ground floor, plus a five-storey building at 65 Old Broad Street.
The development is one of a number of major office investments Landsec has brought to market as part of a strategic change of direction.
Earlier this month it emerged that Landsec has instructed Colliers to sell 123 Victoria Street in London for around £265 million. The headquarters building is occupied by fashion brand Jimmy Choo and British International Investment.
Landsec is also in talks to sell Red Lion Court, a £335 million London office development in Southwark, to alternative asset manager Cheyne Capital Management and seasoned London developer Stanhope, according to Bloomberg. The sale values the land 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, advised by Newmark and Knight Frank, was reviewing whether it would bring in an investment partner for an £800 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. It has now formally begun the sales process.