UPDATE 1-Hammerson buys London office for $95 mln

* Buys Leadenhall Court from defunct CMBS portfolio

* Generates around 7.2 million pounds of rent

(Adds detail, background)

LONDON, June 11 (Reuters) - Real estate investor Hammerson (HMSO.L) is cashing in on distress in Britain's indebted property market after announcing it has agreed to buy London office building Leadenhall Court for 65 million pounds ($95 million).

The 109,000 square foot property, located at the corner of Gracechurch Street and Leadenhall Street in the City of London, is part of the portfolio securing the failed White Tower 2006-3 plc commercial mortgage backed security issue.

Leadenhall Court is one of 9 buildings put on the market by receivers and special servicers after the 1.15 billion pound CMBS defaulted in July last year as a record downturn in UK commercial property prices reached a climax.

Earlier this month, a source close to the transactions told Reuters that private equity house Carlyle Group had entered exclusive talks to buy the mainstay of the portfolio for around 700 million pounds. [ID:nLEE6H4001]

Leadenhall Court is fully let until March 2014 to a subsidiary of RSA Insurance Group plc. It generates rents of around 7.2 million pounds, reflecting an initial yield of 11 percent.

"This acquisition is in line with our strategy to take advantage of attractive opportunities offered by current market conditions," David Atkins, Hammerson chief executive, said.

"The building will allow us to use our asset management skills to create value while offering a high initial yield and an immediate positive contribution to earnings," he added.

Earlier this year, Hammerson and joint venture partner Canada Pension Plan Investment Board paid 297 million pounds to buy the Silverburn shopping centre in Scotland from receivers acting for the mall's holding vehicle The Elementary Property Company and Retail Property Holdings Limited.

(Reporting by Sinead Cruise, editing by Claire Milhench) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)