Hong Kong-listed investor China Motor Bus Company is selling Albany House in London's Westminster to entrepreneur Tony Matharu's UK-based real estate and hospitality firm Integrity International Group for £47 million.
The building sits next to 55 Broadway where Matharu is already bringing forward a major luxury hotel development. In a stock market filing, the group said the price represented a 34% premium to the property’s independently appraised value of £35 million as of 31 July.
“The disposal will unlock the value of Albany House, thereby enabling the company to both enhance shareholder value by returning cash to shareholders and also to further strengthen the financial position of the company,” China Motor Bus said in its filing. “The disposal will remove any need for the company to incur significant capital expenditure for, or to undertake the risk pertaining to, refurbishing or redeveloping Albany House amid the prevailing market conditions in the United Kingdom.”
The 57,809-square-foot freehold office adjacent to St James’s Park Underground station is spread over 12 storeys and has 45 parking spaces at the basement and surface levels.
China Motor Bus bought the building in 1999, with the property let to London Underground Limited on a 25-year lease. London Underground will vacate the property on the lease’s expiry in December.
The property generates annual rent of £2.35 million from entities affiliated with London Underground, including its museum library and the London Transport Museum Friends charity, as well as the London Electricity Board, which rents a portion of the basement floor on a 99-year lease agreement that was signed in 1963.
China Motor Bus said it received an unsolicited offer for the property from Integrity International, which owns the adjoining 55 Broadway, which is the former London Underground headquarters. The firm controlled by British hotelier Tony Matharu is planning to redevelop 55 Broadway into a 526-key hotel, with China Motor Bus saying that Albany House could be incorporated into the project.
The sale leaves the Scorpio House office block in London’s Chelsea as China Motor Bus’s only investment property in the UK.