Taiwanese insurer enters London with €178m office deal

Taiwanese insurer Fubon Life has agreed to buy One Carter Lane in London for £139 mln (€178 mln) from UK listed firm LondonMetric Property.

The deal is conditional upon Fubon Life receiving the necessary regulatory approvals.

Under the transaction, LondonMetric will receive a non-refundable deposit of £6.94 mln. Completion of the sale is expected in January 2015.

Fubon Life Insurance, a unit of Taiwan’s second-biggest financial company by assets, announced last year that it was planning to buy up to €2.5 bn of overseas properties after rules on insurers’ real estate investments were eased.

The 129,000 sq ft (12,000 m2) office property, located opposite St Paul’s Cathedral, is held on a long leasehold. It is 73% let by floor area to MFS and SEB and the landlord is currently in negotiations with a potential tenant regarding the letting of the last two remaining floors.

The contracted net rental income is currently £4.54 mln per annum rising to £6.29 mln upon letting of the remaining space. The property was originally acquired in 2011 for £75 mln and LondonMetric has recently completed a comprehensive refurbishment at a net cost of £15 mln.

On completion of the transaction, net receipts after allowing for unexpired rent-free deductions will amount to £124.8 mln, compared to a March 2014 book value of £106.2 mln.

'Carter Lane is a prime office development which has benefitted strongly from market and asset management-driven valuation growth, and we believe now is the right time to capitalise on this. A sale will release cash for reinvestment into our strong pipeline of opportunities in our core areas of retail and retail distribution,' commented Andrew Jones, CEO of LondonMetric.

LondonMetric was advised by Strutt & Parker and JLL. Fubon was represented by Savills.