Landmark skyscraper on the market for £300m

After 12 years of ownership, the fund manager and pension fund said yesterday they wanted to sell the freehold title of the 600-foot landmark office property, which is 95 per cent let and the tallest occupied building in the City of London.

"With significant global demand now focussed upon central London offices driven by expectation of future returns, combined with a dearth of trophy assets on the market and weak sterling, the partners believe that the timing is right to market the asset," Marcus Sperber, managing director at BlackRock, said.

In addition to the 324,000 square foot multi-let skyscraper, the Tower 42 estate includes five other commercial buildings on a 2.2 acre freehold site.

Offers in this range would reflect a net initial yield of about 6.5 per cent and a capital value of about 630 per square foot, the partners said.

The planned sale is seen by some as evidence for Britain's rapid real estate comeback but some experts fear the recovery may seize this year as banks begin a long-awaited programme of distressed asset sales that may trigger fresh price falls.

Average UK commercial property values are expected to decline by 0.6 per cent in 2011, compared with predictions of a 2.2 per cent annual rise just three months ago, a February survey conducted by the Investment Property Forum (IPF) showed.

Despite the uncertain outlook, Hermes' director Chris Darroch said the opportunity was "a very interesting proposition" for a global investor keen to make their mark on the City landscape.

Adviser Jones Lang LaSalle is marketing the property. Hermes is owned by British Telecom's pension fund.