Two funds by JP Morgan Asset Management have acquired the Bishops Square office complex in London for £557 mln (EUR 657 mln). The vendor is a 75:25 joint venture between Oman Investment Fund, an investment arm of the Omani Government, and UK REIT Hammerson.
Two funds by JP Morgan Asset Management have acquired the Bishops Square office complex in London for £557 mln (EUR 657 mln). The vendor is a 75:25 joint venture between Oman Investment Fund, an investment arm of the Omani Government, and UK REIT Hammerson.
The value of the property at end-June 2010 was £510 mln, with net passing rents at that time of £35 mln.
Announcing the deal, Hammerson said its net proceeds from the sale of its 25% interest, including the receipt of performance payments due from OIF and after taking account of the joint venture's debt and interest rate swap, are £79 mln. This represents a surplus of £34 mln over the last book value.
Bishops Square was developed by Hammerson and completed in 200. It provides 71,900 m2 of office space let to law firm Allen & Overy and an additional 4,600 m2 of retail space. Hammerson sold a 75% stake to OIF in June 2009.
Peter Reilly, Head of J.P. Morgan Asset Management's European Real Estate Group, said: 'We remain bullish on investing in high-quality, well-tenanted office properties located throughout Europe's most important cities and this acquisition represents a further expansion of our funds' core property portfolio in Europe. Hammerson's development of Bishops Square is an excellent, modern headquarters with a long-lease to a single blue-chip tenant so fits our criteria perfectly.'
David Atkins, CEO of Hammerson, said: 'This disposal fits with our strategy of creating value through portfolio management. We retained a stake in Bishops Square after the sale to Oman Investment Fund and have worked well together on the joint venture. We are capitalising on the market recovery over the last 15 months and Hammerson has released funds for investment into other office and retail developments and acquisitions.'
Hammerson and OIF were advised by Clifford Chance and Jones Lang LaSalle, while JP Morgan Asset Management's funds were advised by Berwin Leighton Paisner and Deloitte.