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Financial Times: Shell-Mex House on market for £520m

By Jim Pickard, Property Correspondent
Published: January 27 2006 02:00
Robert and Vincent Tchenguiz, the property investors, are poised to put one of London's most prominent landmarks on the market at an estimated asking price of £520m.
Shell-Mex House, an Art Deco building next to the Savoy hotel on the Strand, was bought by Rotch, the Tchenguiz brothers' company, and entrepreneur Jack Dellal for £327.5m in early 2002.
The purchase, from Lehman Brothers and Steven Witkoff, the New York property developer, was at the time the biggest single investment in a UK building.
Nearly four years later, in one of the hottest commercial property markets ever seen in London, the building is likely to attract bids well over half a billion pounds.
The 575,000 sq ft building is occupied by Pearson, the owner of the FT, Vodafone, Omnicom and Shell. It generates annual rent of £25.5m. An offer of £520m would imply a gross initial yield of about 4.9 per cent.
It is understood that the building, which looms large over the Thames, will be marketed by CB Richard Ellis and DTZ, the property agents.
The 13-storey building, with a central clock tower, started life in 1886 as the Cecil Hotel, then the largest hotel in Europe, and was bought by Shell Mex in 1930.
The Tchenguiz brothers, along with rivals Ian and Richard Livingstone, are close to selling a £400m portfolio of Shell garages.
It is understood that the 180 petrol stations will be bought by the Englander Group, a north London family trust, on a net initial yield of 6.5 per cent.
The obscure group beat off competition from the likes of Golfrate and Reit Asset Management to buy the garages, which have Shell leases until 2017.
The Livingstones and Tchenguiz brothers bought the stations in 2000 for £300m.

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