Hines buys London's Stonecutter Court for £91m

US developer and investor Hines has acquired the Stonecutter Court office complex located on a full city block on Farringdon Street in the heart of London from Shalati Investments Limited, a partly-owned subsidiary of Delek Global Real Estate. The acquisition amounts to around £91 mln (EUR 104 mln) and is being funded with proceeds from Hines Global REIT's public offering along with a £57 mln five-year debt facility from Landesbank Baden-Württemberg.

'We are pleased to expand the international presence of Hines' Global REIT with our second UK acquisition for this fund and first in London,' said Hines UK Director Ross Blair. 'We were attracted to Stonecutter Court by the improving infrastructure in the immediate area. We remain committed to acquiring assets with similar characteristics, and Hines UK expects to be active for this and other funds during 2011.'

The acquisition comprises 152,829 sq ft (14,200 m2) in three fully-let buildings: a 139,848-sq-ft office building known as Stonecutter Court that is fully leased to Deloitte until 2019 and generates rents of £6.2 mln; a 9,258-sq-ft office building at 81 Farringdon Street that is leased as a Barristers chambers; and a 3,723-sq-ft public house at 80 Farringdon Street that is leased to Shepherd Neame, an English brewery/pub. The estimated yield for Stonecutter Court is approximately 6.76%.

The property was completed in 1995, and in 2007 underwent an internal refurbishment to align Stonecutter Court with the aesthetics at Deloitte's nearby offices to create a unified Deloitte campus.

'Stonecutter Court is a special acquisition for Hines Global REIT because of the opportunity to invest in a quality asset in London,' said Charles Hazen, president and CEO of Hines Global REIT, a Houston-based, public, non-listed real estate investment trust sponsored by Hines.