Delancey set to pounce in £30m deal

PROPERTY group Delancey's £1.5bn investment fund, backed by US financier George Soros, is to make its first major office investment in London with £30m deal to buy the new West End headquarters of Chevron Texaco from embattled life and savings group Britannic Asset Management.

According to Estates Gazette, the 50,000 square foot building at 6 Chesterfield Gardens, W1, will be the first office acquisition for the opportunity fund set up by Delancey, the former listed property group taken private three years ago by James Ritblat, son of British Land chairman John Ritblat.

At least £300m of the equity in the property fund comes from investors, including Soros, who is a long-standing backer of Ritblat junior's group. The equity will be geared up to at least £1.5bn.

Britannic has been trying to sell the building - along with several other property holdings - for more than a year. It had wanted £33m and offered a two-year rent guarantee at higher than the £52.50 per square foot achieved with Chevron, but Delancey is not expected to take the guarantee.

Delancey is aggressively seeking stock for the seven-year to 10-year fund in the UK and Ireland. Since setting up the fund last month, the company has bought only the £30m, 60,000 square foot Sainsbury's in Pimlico, SW1.

Chesterfield Gardens was bought and refurbished by Britannic two years ago but it has failed to let fully. Earlier this month, energy giant Chevron Texaco took 15,000 square feet, paying about £48.50 a square foot, some £16 per square foot less than Britannic initially marketed the building for.

Three floors remain vacant and Delancey had been tipped as a potential occupier because it plans to leave its present Portman Square HQ to redevelop the building.

However, a source close to the deal said: 'Delancey is having planning problems with its Portman Square scheme and will not need to move for another year. But it could move other tenants from Portman Square to Chesterfield.'

The source added: 'The building fits within Delancey's model of prime location and good tenants but with room for growth.'

The deal will take Britannic's property sales since June to about £150m. Crossland Otter Hunt is advising Britannic.