Landsec has sold a recently consented £200 million office development site in London's Southwark to an investor planning a hotel scheme.
In a LinkedIn post, JLL confirmed Landsec had sold 22-24 Southwark Bridge Road for redevelopment as a "best in class" hotel on the Southbank. The transaction demonstrates the much-documented investor demand for the conversion of offices to alternative uses.
The buyer is understood to be Latium Enterprises, led by British entrepreneur Brian Kennedy. Compton is advising.
The deals is part of a massive sell-off of London office assets as Landsec pivots towards residential and shopping centres. It is the second asset to be sold for a major hotel makeover as part of the process after Arora agreed a £245 million acquisition of the Ministry of Justice's offices at 102 Petty France in Westminster.
22 Southwark Bridge Road was constructed in the 1980s and comprises 55,866 square feet over basement, lower ground, ground and six upper floors. 24 Southwark Bridge Road was also constructed in the 1980s and comprises 23,565 square feet over lower ground, ground and six upper floors. The properties are multilet to five tenants, producing an annual rent of £161,400.
Landsec gained consent earlier this year for an office redevelopment designed by Orms Designers & Architects that proposed 141,459 square feet and 205,397 square feet of offices over lower ground, ground and 12 upper floors.
The site was marketed with potential for alternative uses including coliving, student and hotel.
Landsec is speeding ahead with its London office disposals. In full-year results published in May, the REIT confirmed it was accelerating its shift away from offices towards retail and residential.
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.
Last week it emerged that AshbyCapital is in the driving seat to invest in 55 Old Broad Street, after strong bidding for the £600 million development site in the City of London. CoStar News revealed in July that Landsec had appointed Newmark and Knight Frank to handle the sale.
Landsec, advised by the same duo, is understood to also be receiving strong bidding for Hill House, an £800 million office tower development on the site of a nine-storey building off Shoe Lane in the City of London. The REIT gained consent in April 2024 for the 20-storey mixed-use office building.
Landsec, advised by Colliers, is also reportedly in talks to sell 123 Victoria Street in London for around £225 million to US alternative asset manager Sculptor Capital Management and LBS Properties. The headquarters building is occupied by fashion brand Jimmy Choo and British International Investment. Green Street News revealed the talks.
The REIT has also sold Red Lion Court, a £335 million London office development in Southwark, to alternative asset manager Cheyne Capital Management and seasoned London developer Stanhope. The sale values the land at around £45 million. It had 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.
JLL and Compton did not comment.
Landsec said in a statement: "We've set out a clear strategy to rotate capital out of pre-development sites and into areas where we can deliver an attractive income return and sustainable income growth. We're making good progress in capital recycling as investment activity in London offices recovers."