Prupim acquires HSBC property in sale and leaseback

Prupim has purchased HSBC Bank's Park Street building in London in a sale and leaseback deal. The transaction price of £103 mln (EUR 150 mln) reflected an initial yield of 4.72%. Prupim, the real estate arm of UK financial services group Prudential, made the purchase on behalf of one of its annuity funds, Prudential Retirement Income.

The building is on the south side of the River Thames and is surrounded by a number of landmarks, including the Tate Modern and the Millennium Bridge. The newly refurbished property comprises almost 15,000 m² of flexible office accommodation over six floors. HSBC has leased the property back for 20 years.

Steffan Francis, director of Institutional Funds at Prupim, commented: 'The size and scale of Prupim's real estate investment activity enables us to access and agree opportunities quickly. In this case, we have been able to secure another property that not only has a steadily growing long-term income stream backed by a very strong covenant, but also has wide ranging potential in the long term. Both Prudential Retirement Income and Prudential Annuities have a strong appetite to invest further in properties with equally strong long term cash flows.' Catella acted for PRUPIM and CBRE advised HSBC.

Earlier this year Spanish property company Metrovacesa acquired HSBC's global head office at Canary Wharf in London for EUR 1.59 bn in the largest single property deal in British history.