Westbrook buys landmark in £494m deal

Shell-mex House, a landmark on London's Strand which is owned by some of the UK's biggest property tycoons, has been sold for just under £500m to US fund manager Westbrook.

The sale follows 16 months of wrangling over the 550,000 sq ft art deco building. It was first put on the market in March last year by a consortium of private investors that include Robert and Vincent Tchenguiz, David and Simon Reuben and Jack Dellal.

A few months later the building, whose tenants include oil company Shell and Financial Times owner Pearson, went under offer to the Indian Kandhari family for about £540m. This was despite a debate between the owners over whether to sell it. The Reubens are thought to have offered to buy out the others.

The deal with the Kandhari family fell through and other parties such as Land Securities, US group Tishman Speyer, tycoons Sir Tom Hunter and Nick Leslau, along with Baugur, the Icelandic group, were linked to the building.

In December, Dubai's ruling Maktoum family emerged as a bidder. The family planned to buy the building through its investment group Istithmar, which had been on a spending spree, snapping up P&O for £3.6bn and West End trophies such as the Adelphi office building, also on the Strand.

The sale was due to complete in January but abandoned again amid concerns about the rising cost of borrowing.

In May, US fund manager Westbrook, advised by Knight Frank, entered advanced talks to acquire Shell-Mex. Today, the deal is due to complete for about £494m. The yield is below 5pc but a rent review is due in July.

It will net the consortium, which was advised by CBRE, a 50pc increase on their initial investment. They bought the building from Lehman Brothers in 2002 for £327m.