Fubon Life buys London's Madame Tussauds for €489m

Taiwanese insurer Fubon Life is acquiring the home of Madame Tussauds, the world famous wax museum in London.

The investment volume of £332.5 mln (€489 mln) in cash reflects a yield of 4.7%.

The UK office of German listed real estate company Patrizia Immobilien acted as investment manager for Fubon. Secure Income REIT was represented by CBRE.

Fubon, which has €64 bn of assets under management, entered London in November 2014 with the acquisition of an office property at One Carter Lane for €178 mln.

The Madame Tussauds property was sold by London AIM-listed REIT Secure Income. The company confirmed back in February this year that the iconic tourist attraction Marylebone Road in Central London was up for sale following ‘unsolicited expressions of interest’.

Completion of the transaction is expected in the third quarter of 2015.

The property is let on a full repairing and insuring lease to Merlin Attractions Operations, the owner and operator of Madame Tussauds, guaranteed by Merlin Entertainments, the world’s second biggest visitor attraction business with a market capitalisation of circa £4.7 bn.

The lease runs for a minimum of a further 27 years with the option for the tenant to extend by up to a further 70 years upon expiry, bringing the potential tenancy length to almost 100 years from today. The current rent payable on the property is £15.7 mln per annum and the lease provides for uncapped, upward only annual rent reviews throughout the term geared to RPI (Retail Price Index).

Madame Tussauds has occupied the current site for more than 130 years and has consistently been one of London’s most successful tourist attractions. This is the first time ever that this property investment has been sold individually in the open market.

The contract price of £332.5 mln represents an 8% premium to the valuation of the property at end-December 2014 of £309.3 mln.