Land Securities Group PLC offloads two central London buildings for

Group PLC () announced that it has agreed to sell two central London buildings to real estate investor Sun Venture for £552mln in cash.

The office and retail property giant said it will use the proceeds to pay down debt before reinvesting into growth opportunities over time.

READ: Land Securities restarts dividend despite pandemic’s impact on values and income

Completion of the disposals is expected to take place by the end of this month and is unconditional, it added.

The FTSE 100 firm is reviewing its central London portfolio as part of a strategy review.

The two buildings, 1 & 2 New Ludgate, are located near St Paul’s Cathedral and provide a combined 389,615 square feet of office and retail accommodation developed by  in 2015. 

They generate an annualised contracted rental income of £23.7mln and were valued at £546.4mln as of March 31, 2020.

The deal is the second UK acquisition for Sun Venture, and follows the recent purchase of One New Oxford Street from Nuveen Real Estate, one of the largest investment managers globally, on behalf of Central London Office Fund and British Airways Pension Trustees.

“Pressure on retail property valuations is likely to continue although London office demand remains robust with a shift in management’s cautious approach as the on-site development pipeline has increased over the last six months,” analysts at Liberum Capital pointed out in a note to clients.

“Low financial gearing limits downside risk and provides significant firepower to acquire new assets or potentially return capital from major disposals,” they added.

Land Securities shares added 1% to 716p on Friday morning.