Great Portland Estates has announced the sale of its largest ever development project at a discount to its most recent valuation, as the West End property developer steels itself for an expected dip in the London property market.

A company owned by German investment fund Deka has agreed to purchase the Rathbone Square development in Fitzrovia – the future London home of Facebook – for a headline price of £435m, a four per cent discount to its valuation from last September.

The sale brings Great Portland’s total capital return for the development project to £110m, which it expects to return to shareholders through a special dividend.

Great Portland said it would retain the remainder of the proceeds to provide it with more “financial flexibility” as it prepares for “a continued period of market uncertainty”.

In November the FTSE 250 group said that last June’s vote to leave the EU had “had a negative effect on business confidence” which it expects will weaken London’s commercial property markets.

Deka has already paid £113.5m as part of the deal, with the remainder to be paid in instalments after the completion of the Facebook leases in April and the sale of further retail and residential units over the following months.

Toby Courtauld, Great Portland chief executive, said:

Rathbone Square is our largest ever development scheme and this sale continues our successful strategy of recycling capital out of assets where we have created significant value.

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