Landsec has appointed Savills, alongside investment bank Lazard, to sell the freehold of its one-acre island site at London’s famous Piccadilly Circus, including newly developed offices, shops and the land beneath the Piccadilly Lights – the neon London landmark with large-scale video billboards, the equivalent of New York City's Times Square – for a guide price of £450 million.
This would be the largest single sale in London's West End since 2012.
The site, known as Lucent, comprises 188,000 square feet of mixed-use space, of which the offices make up 126,000 square feet. The retail and leisure element includes four flagship stores totalling 58,000 square feet, on Regent Street and Shaftesbury Avenue, which are leased to tenants including Boots and Lindt.
The sale will include the freehold that underpins Piccadilly Lights, the largest advertising screen in Western Europe. Landsec would continue to operate the digital infrastructure on a new 250-year leasehold and retain 95% of its net operating income.
Paul Cockburn, director in the Central London Investment team at Savills, said in a statement: “This Picadilly Circus site is world-renowned and represents an incredibly rare opportunity to buy not just a high-profile freehold asset in London’s West End but also a high-quality new development completed only two years ago.
“This is a highly successful scheme that was largely pre-let and so is now leased at below-market rents. With limited risk exposure and exciting growth characteristics, we expect it to appeal to investors across the globe.”
Piccadilly Circus is a road junction in London's West End that acts as a gateway for some of the capital's most popular tourist hotspots and shopping and theatre districts. It was built in 1819 to connect Regent Street to Piccadilly.
Illuminated advertising hoardings on buildings have been a feature of Piccadilly Circus since the early 20th Century, but the famous building hosting them on the northwestern corner between Shaftesbury Avenue and Glasshouse Street has been owned by property Landsec since the 1970s.
In full-year results published in May, Landsec confirmed it was accelerating a 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.