Greycoat JV buys City office

Greycoat has teamed up with Cheyne Capital to buy Procession House in the City of London.

Greycoat bought the 105,000 sq ft (9,750 m2) office building at 55 Ludgate Hill alongside co-investor Cheyne Capital for £62.5 mln (€74 mln), reflecting a yield of 7%.

The acquisition is part of Greycoat's new focus on partnering with off-shore capital providers looking to invest in central London offices.

Tenants include Goldman Sachs, Waterstones and Starbucks, with a total rent roll of £4.4 mln per annum.

Greycoat sourced the property, led on the legal, accounting and real estate due diligence, and sourced and negotiated the debt from senior debt provider Santander.

Greycoat also said it assisted Canadian fund Ivanhoe Cambridge and US private equity firm TPG with the purchase of the 340,000 sq ft City office building, Woolgate Exchange. Greycoat is currently working with the owners on the asset management of the building.

The asset was acquired for £265 mln in January 2013 and is let to Portigon Services at a rent of £16.7 mln per annum. MetLife was the senior debt provider.

'This strategic change in emphasis of our business is a reflection of the change in dynamics in the central London office market,' said Nick Millican, chief executive of Greycoat. 'This is a market dominated by off-shore investors looking to invest on an attractive risk-adjusted return basis in one of the largest and deepest CRE markets in the world.'

Greycoat has existing mandates for the asset management and development management of 1.5 million sq ft of central London property.