Great Portland Estates said today it has swapped its lease on a property on Oxford Street from freehold to leasehold

Great Portland announced today that it has swapped its freehold interest in 79/89 Oxford Street as part of the deal with a private investor, in return for a new 250 year leasehold interest at both 79/89 Oxford Street and the adjoining property, 73/77 Oxford Street.

The properties are located in a prominent position at the corner of Oxford Street and Dean Street, adjacent to the Dean Street Crossrail station currently under development, and “form an exciting potential redevelopment site of 0.43 acres”, according to the firm.

The two properties total 82,190ft2 of office and retail accommodation and produce an income of around £2.6m per year from 12 tenants, with the majority of leases running to the end of 2014.

The new 250 year lease will initially pay a fixed rent of £620,000 per year until the first redevelopment, when the ground rent will change to a base rent of £310,000 per year. The private investor will receive a premium of £7.5m as part of the swap.

Commenting on the deal, Toby Courtauld, Great Portland chief executive, said: “We are delighted to have carried out this property swap. The properties are located in an exciting area of Central London set for major change and which, in the fullness of time, will offer a first class retail and office development opportunity. In the meantime, the buildings are fully let at sensible rents and offer some interesting asset management opportunities.”