Landsec has announced the unconditional sale of Queen Anne’s Mansions (QAM) in SW1 to the Arora Group, in a £245 million deal that crystallises significant value and strengthens the company’s capital recycling strategy.

The office building, originally developed by Landsec in the 1970s, is currently fully let on a lease running until December 2028. While the asset continues to generate stable rental income, much of its current valuation is tied to its long-term redevelopment potential.

The transaction represents substantial early progress towards Landsec’s target of releasing £2 billion of capital from office assets by 2030. The strategy is focused on repositioning the portfolio towards holdings that deliver sustainable income growth and improved returns over the long term.

Completion of the sale is expected in early December 2025, following the receipt of a 10 per cent non-refundable deposit. The £245 million sales price is in line with the asset’s expected book value, adjusted for income receipts and depreciation since the last valuation date. The disposal is anticipated to reduce Landsec’s loan-to-value ratio by 1.3 percentage points, to 38.4 per cent.

As the transaction was achieved earlier than planned, the finance lease income originally due to be received across 2025 and 2026 will instead be consolidated as a capital receipt in 2025. While this reallocation will reduce EPRA earnings in FY26 and FY27, overall cash generation remains unaffected, with proceeds available for reinvestment into accretive opportunities.

Mark Allan, Chief Executive Officer of Landsec, commented: “This sale provides clear evidence of recovery within the central London investment market and enables us to crystallise full value for this off-strategy asset sooner than anticipated. Including QAM, total disposals since March stand at approximately £500 million, ahead of expectations and underpinned by strong operational performance across the wider business. This represents encouraging progress towards delivering our long-term strategy.”

The deal also reinforces signs of renewed confidence in London’s office investment market, with institutional and private buyers seeking prime opportunities to capitalise on redevelopment potential and long-term rental growth.

Building, Design & Construction Magazine | The Choice of Industry Professionals