Taiwanese insurer bags London's Walbrook Building for €802m

Taiwan-based insurer Cathay Life has emerged as the buyer of the Walbrook Building, a prime City of London office and retail asset, for £575 mln (€802 mln).

The 41,000 m2 Walbrook Building was put on the market earlier this year by Minerva, a UK private property firm jointly owned by Ares Management and Delancey. The property was expected to fetch around £500 mln.

Delancey and Ares bought the building when it was completely vacant in August 2011 for £200 mln.

Designed by architects Foster & Partners, the property is currently home to international office tenants, including Worldpay, Arthur J. Gallagher & Co, Xchanging, and Vanguard. Virgin Active and Waitrose have recently signed long-term leases in the retail portion of the building.

The freehold asset is located in the centre of the City of London, within 150 metres of the Bank of England and directly opposite Bloomberg's new European headquarters. It boasts a BREEAM Excellent environmental rating.

Knight Frank acted on behalf of Minerva.

Safe haven
The sale of The Walbrook Building marks Minerva’s fourth asset sale since 2011, following the sale of the Ram Brewery to Greenland Group and the fully-let St Botolph Building to Deka.

International investors looking for a safe haven away from the eurozone’s troubles are fuelling the UK’s real estate recovery. Research by C&W indicates that more than $20 bn (€18.8 bn) was invested in London in 2014, equivalent to the market’s previous peak year of 2007, with foreign investors accounting for 80% of the volume in the City and more than 60% in the West End.

Taiwanese insurers
New players such as Taiwanese life insurers Cathay and Fubon have been noticeably active, making investments of $200 to $500 mln as they apply the huge savings rates in Asia to international markets. According to press reports, Fubon is in advanced negotiations to acquire the iconic Madame Tussauds in London from Secure Income REIT. The property is expected to trade for around £350 mln.

‘We’ve got low vacancy rates, we've got strong tenant demand and we’re predicting that because supply is limited for the next two or three years, rental growth is going to continue all the way through for the next three to four years,' commented James Beckham, head of London capital markets at Cushman & Wakefield.

‘So the property fundamentals are fine and international investors are wanting to come into a Sterling-based real estate asset, keeping out of the euro because there’s a lot of risks attached about what's happening in the eurozone.’