Tuesday 25 September 2018

Korean investors snap up London offices for $352m

Cannon Bridge House is just one of a number of London properties Blackstone intends to sell
Cannon Bridge House is just one of a number of London properties Blackstone intends to sell

Jack Sidders

Blackstone Group LP has exchanged contracts to sell the headquarters of IG Group Holdings Plc in the City of London financial district to a group of Korean investors.

A venture between South Korea's Mirae Asset Daewoo Co. and NH Investment and Securities Co. will pay Stg£248m ($352m) for Cannon Bridge House, according to a statement issued last Monday. The deal was led by asset managers FG Asset Management and the Valesco Group.

"The investment backed by Korea's two largest securities houses is a first move for both institutions in London, demonstrating the appeal of prime City of London assets that combine both long income and asset management upside," Valesco Group chief executive o fficer Shiraz Jiwa said in the statement.

"This is a landmark acquisition of a one-of-a-kind City of London office asset, which was sourced and exchanged in a matter of weeks. The real estate fundamentals for Cannon Bridge House are unique and will be brought to bear over our holding period," he added.

Blackstone is in the process of selling about Stg£1.4bn of offices in the capital after the firm modernised the buildings and leased space at higher rents. The private-equity firm bought Cannon Bridge for about Stg£170m in 2015.

Rising interest rates that have pushed up the cost of borrowing in the US and record prices in other large European cities have made the UK capital attractive again to buyers from Korea.

After two years with no deals, they spent Stg£311m on London commercial real estate in 2017, the most since 2013, data compiled by CBRE Group Inc shows.

(Bloomberg)

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