NorthStar Realty Europe (NRE) has partnered with Hong Kong-listed developer China Resources Land (CRL) on its first European real estate investment, the acquisition of a City of London office building for €348 mln.
The property at 20 Gresham Street was sold by AXA Investment Managers - Real Assets (AXA IMRA).
The asset provides 22,300 m2 of office space over seven floors, located in close proximity to St Paul's Cathedral and the Bank of England.
The list of tenants includes blue-chip financial services firms ICBC Standard Bank, TSB Bank, Sacker & Partners, and TLT. The average current rents are significantly lower than typical market rents for similar quality office buildings located in the vicinity, according to Northstar Realty Europe (NRE).
NRE is a European-focused REIT predominately investing in office assets, and managed by a subsidiary of New York-listed equity REIT Colony Northstar.
In this transaction, NRE is contributing about €30 mln by way of preferred equity, while the bulk of the purchase price comes from CRL.
Mahbod Nia, CEO of NRE, said: '20 Gresham Street is a highly desirable building with a prime location in London and we feel confident there is significant opportunity to add value and drive strong returns through a number of pro-active initiatives.'
Hong Kong-based developers and investors are playing a leading role in real estate investment in London post-Brexit. As the Greshman Street deal was announced, UK REIT British Land and Oxford Properties, the global real estate arm of Canada's OMERS pension fund, completed the £1.1 bn (€1.35 bn) sale of The Leadenhall Building in London to Hong Kong investor CC Land.
