Telereal Trillium Test Investors Appetites

Property investment firm Telereal Trillium has put up for sale 55 UK commercial properties, principally let to the Royal Bank of Scotland (RBS.L), to test investor appetite for larger portfolios, it said on Wednesday.

Telereal, owned by the Pears family, has appointed CB Richard Ellis (CBG.N) to advise on the sale, with a guiding price of 475 million pounds ($758 million) for the properties, including the historic London offices of the Queen's bank, Coutts.

"Following the purchase of this portfolio two years ago we have had regular enquiries from many parties interested in acquiring single assets," Telereal group property director Graeme Hunter said in a statement.

"Since the summer however, the level of interest in a larger portfolio transaction has increased dramatically and as such we see the time as being right to test the market's appetite for this excellent product," Hunter said.

British commercial property values in November posted the largest monthly increase in 15 years, up 2.4 percent. The market has rebounded since mid-2009, following a two-year downturn that wiped 44 percent off commercial property values. [ID:nLDE5BD1XN]

JPMorgan property analyst Harm Meijer said it was interesting to see larger portfolios being brought to market because of firmer prices.

"This is in line with our view that there remains a considerable overhang of property that may come to market as investment appetite strengthens, and in our view will limit the bounce in prices," he said.

The company said flagship assets in the portfolio, mainly leased by RBS until 2037 with annual retail prices index (RPI) rental increases, include the London headquarters of RBS-owned private banks Coutts on The Strand, Drummonds on Trafalgar Square, and Child and Co on Fleet Street.

More than 45 percent of the portfolio's income is derived from assets in London, the company said.