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HS2 pays £130m for freehold on Central London office

Property developers Derwent London has agreed to sell its 132-142 Hampstead Road office to the Secretary of State for Transport in one of the first big property disposals in Central London following HS2 getting the green light.

The state is to pay £130m to acquire the freehold for the building which encompasses 219,700 sq ft of floorspace, which is currently let to University College London.

Derwent acquired the property back in 2007 and had planned to develop a further 233,000 sq ft of offices and 38 residential units, receiving planning permission for the proposals in 2010.

However, the government’s proposals for a new high-speed rail line, first announced back in 2012, put the developer’s plans on hold and with the first phase of HS2 being granted royal assent last week, Derwent has decided to dispose of the building.

In a statement to the stock exchange announcing the decision, the developer said that the disposal of the freehold represented a £15m uplift on the property’s book value in December 2016, although this did not take account of the ‘very valuable’ planning consent which had been attained.

In a terse statement, John Burns, Chief Executive Officer of Derwent London, commented: “We are pleased to have concluded the sale of this well located property to HS2. The transaction will provide greater certainty both for Derwent London and for the future of the site.”

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