London-based European real estate investment manager Valesco has joined forces with Seoul-headquartered AIP Asset Management to acquire Microsoft’s UK HQ campus in Reading, UK, for £100 mln (€112 mln) from special servicer Solutus and FI Real Estate Management.
The price represents a net initial yield of circa 6.6%. The investment is backed by a consortium of South Korean institutional investors.
The landmark freehold campus was developed by Microsoft and is let in its entirety to Microsoft Limited, the global technology company’s UK subsidiary, at an average rent of £27 per sq ft.
Comprising 246,138 sq ft (22,900 m2) of grade A office space across three buildings, the property is located in Thames Valley Park, the closest of Reading’s three major business parks.
The acquisition builds on Valesco’s and AIP’s (formerly known as FG Asset Management) deployment of capital in the UK market in 2018 which commenced with the £248 mln acquisition of Cannon Bridge House in the City of London, also backed by South Korean investors.
Shiraz Jiwa, CEO of the Valesco Group, commented: 'This acquisition demonstrates our ability to unlock a complex holding structure by acting quickly and having the capital available to deploy. By doing this, we have secured a prime, sought-after asset in a strategically important location, which is generating high-quality income backed by an exceptional covenant.'
He added: 'This transaction continues our commitment to the UK market where, in addition to mainland Europe, we see strong potential to further deploy capital to deliver value for our investors.'
BNP Paribas Real Estate advised Solutus and FI Real Estate Management.
