Feb 10 (Reuters) - London property and investment company Great Portland Estates said it had sold the freehold of Rathbone Square to an entity owned by German real estate investment trust WestInvest Gesellschaft and property assets manager Deka Immobilien Investment for a headline price of 435 million pounds ($543 million).
The sale, which reflects a net initial yield to the buyer of 4.25 percent, will bring a whole-life capital return of about 110 million pounds to Great Portland, it said.
Great Portland, whose portfolio is dominated by office property but also includes retail and some residential property, said it expected to return the whole-life surplus to shareholders as a special dividend.
The sale of Rathbone Square is expected to be broadly neutral to EPRA earnings - a measure of the value of its properties - for the current financial year, Great Portland said.
The sale price represents a discount of 4 percent to the September 2016 valuation, adjusted for subsequent capital expenditure.
The 419,700 square feet mixed-use development is currently under construction and 242,800 square feet of office space is pre-let to Facebook on a 15-year leases at an initial annual rent of 17.8 million pounds.
"The pricing of the asset with an uber prime covenant of Facebook... is disappointing at an exit yield of 4.25 percent compared with a peak valuation of nearer 3.75 percent we estimate," Jefferies analysts wrote in a note.
Great Portland in November cut its full-year rental growth forecast due to the uncertainty after Britain's vote to leave the European Union. The company, however, said last month that it saw "healthy" interest despite economic uncertainty.
$1 = 0.7999 pounds Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair