Mitsubishi Estate Company (MEC), Japan's largest listed real estate company, has acquired a government-let office block in London as part of its plan to double its UK portfolio by 2020.
Mitsubishi Estate Company (MEC), Japan's largest listed real estate company, has acquired a government-let office block in London as part of its plan to double its UK portfolio by 2020.
MEC acquired Clive House from German investor Real IS for £90 mln (€107 mln), reflecting a net initial yield of around 4.23%.
Located at 70 Petty France, SW1, Clive House comprises 8,000 m2 let to the Secretary of State for Transport, Local Government and the Regions until 2027. The property generates £4 mln of rent per annum and has fixed annual increases of 2.5%.
Real IS purchased Clive House for its institutional fund BGV III in 2008 for around €65 mln.
In January 2013, Mitsubishi bought 1-19 Victoria Street SW1, also let to the government until 2021.
MEC's UK managing director, Hiroyuki Arimura, said: 'This acquisition has an excellent covenant and fits in very well with our existing portfolio in terms of income profile and lease length. It offers stable income with fixed uplifts and a longer term redevelopment opportunity. We have a strategic goal of doubling our UK portfolio by 2020 and are actively seeking other central London opportunities particularly in the West End.'
Colliers International advised MEC and Knight Frank acted for Real IS.
