Gowling WLG advises LaSalle Investment Management on property swap and JV with Derwent London

10 February 2015

In February 2015, Gowling WLG advised client LaSalle Investment Management (LaSalle) on an innovative property swap agreement with Derwent London (Derwent).

The deal saw Derwent acquire a minimum 175-year leasehold on 20 Farringdon Road, Clerkenwell, in London's Tech Belt. LaSalle retained the property's virtual freehold and the right to receive 10% of all rents.

In return, Derwent disposed of two properties - 22 Kingsway WC2, for £64.5 million, and Mark Square House EC2, for £32.1 million, representing net initial yields of 4.4% on both properties. The price of the acquisition is £88 million before costs, and the combined disposal proceeds are £115.3 million. Derwent received the balance of £27.3 million in cash before costs.

In addition, both companies took a 50% share in a joint venture to hold 9 and 16 Prescot Street E1. The properties were significant in that they were income-producing in the short term, but with future redevelopment opportunities across the whole site.

John Burns, partner at Gowling WLG, said: "As always, it was a privilege to work as part of the LaSalle team on this significant transaction. Swap deals tend to have their own particular challenges and this one was no different; but that of course makes them all the more satisfying to conclude. We are delighted to have played a part in making the transaction happen and wish both parties much success with the future of the joint venture."


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