A Westminster property owned by real estate behemoth Landsec, which has housed significant government departments, has been acquired by a consortium vying to spearhead Heathrow Airport’s expansion programme.
The disposal of Queen Anne’s Mansions, situated in SW1, by Landsec represents a significant milestone in the property company’s strategy to offload £2bn worth of its office holdings by 2030, as reported by City AM.
The Arora Group, a hospitality operator running 13 hotels across transport centres throughout London and the South East, secured the site for £245m – marginally beneath the anticipated book value of £256m.
The premises housed the Home Office until 2005 and currently serves the Ministry of Justice.
The office remains fully let until December 2028, ensuring the new proprietors will collect rental revenues until that date, after which they will have freedom to redevelop the site.
The unconditional disposal is anticipated to complete in early December 2025.
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Landsec characterised the transaction as “immediately accretive” to return on equity.
The agreement is projected to decrease Landsec’s pro-forma LTV (Loan-to-Value) by 1.3 per cent to 37.1 per cent, signalling a strengthening of the company’s financial position through reduced borrowing relative to assets. Mark Allan, Chief Executive Officer at Landsec said: “This sale provides strong evidence of the continuing recovery in the central London investment market and allows us to crystallise a full value for this off-strategy asset much sooner than we had envisaged.”
For Arora, the transaction delivers a substantial enhancement to the group’s capital resources as it advances its “Heathrow West” expansion strategy.
The heart of Arora’s airport proposal centres on a more compact 2,800-metre third runway alongside a fresh Terminal 6.
The blueprints address the most complex element of Heathrow’s own scheme: the requirement to construct above or bore beneath the M25 motorway.
Arora, which has formed an alliance with international engineering giant Bechtel, maintains its methodology can be executed at a reduced total cost (below £25bn, versus the airport’s own projection of up to £49bn) and within an accelerated timeframe.
