Landsec has agreed to sell its Queen Anne's Mansions (QAM) office block in London to Arora Group for a deal worth £245m.

The property group said the disposal of the asset marks “significant early progress” on an objective to release £2bn of capital from offices by 2030.

QAM was developed by Landsec in the 1970s and is currently fully let on a lease expiring in December 2028. Most of the valuation of the asset is linked to its future redevelopment potential, Landsec said, with the balance of value stepping down in line with the receipt of rental income over the remainder of the current lease.

As the sale has been achieved earlier than Landsec had planned, the residual finance lease income on QAM, which runs until December 2026, will now be received as a capital receipt in 2025 rather than as income across 2025 and 2026. The overall amount of cash generated for Landsec is essentially the same, but this will impact it FY26 earnings by £7m and for FY27 by £15m, it also revealed.

Landsec CEO, Mark Allan, said: “This sale provides strong evidence of the continuing recovery in the central London investment market and allows us to crystallise a full value for this off-strategy asset much sooner than we had envisaged.

“Including QAM, overall disposals since 31 March now total c. £500m, which is ahead of our initial expectations and, combined with continued robust operational performance across the business, means we are making encouraging early progress in delivering against our strategy.”

The unconditional sale, for which Landsec has received a 10% non-refundable deposit, is expected to complete in early December.

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