Seoul-headquartered asset manager FG Asset Management and London-based Valesco have exchanged contracts to acquire Cannon Bridge House in the City of London for £248 mln (€284 mln).
The acquisition was backed by South Korean investors Mirae Asset Daewoo and NH Investments & Securities, and marks the first foray into the UK by both investment groups. The riverside property was sold by real estate funds managed by Blackstone for a net initial yield of circa 5.2%.
Shiraz Jiwa, CEO of the Valesco Group, commented: 'This is a landmark acquisition of a one-of-a-kind City of London office asset, which was sourced and exchanged in a matter of weeks. The investment backed by Korea’s two largest securities houses is a first move for both institutions in London demonstrating the appeal of prime City of London assets that combine both long income and asset management upside.'
He added: 'This is the first in a series of deployments by the FG Valesco joint venture as we target assets in the UK and mainland Europe which offer future upside based on a rigorous analysis of the underlying real estate fundamentals.'
Interconnecting buildings
Cannon Bridge House provides 286,595 sq ft (26,626 m2) of office space split across two interconnecting buildings, the newly refurbished River Building and the Atrium Building. The property provides a landscaped roof garden extending to over an acre, offering views across the Thames which encompass Tower Bridge, The Shard and St Paul’s Cathedral.
The River Building comprising 91,698 sq ft, has recently undergone a comprehensive £27 mln refurbishment and is 100% let to tech and media companies including Deliveroo. The Atrium Building provides a further 194,897 sq ft of institutional office accommodation and is 100% let to tenants predominantly in the financial services sector, including Natixis and IG Group. The property has a weighted average unexpired lease term in excess of 10 years.
The asset's current average passing rent is at circa £46 per sq ft.
Savills and HFF advised Blackstone.
