Sellers continue to trickle offices into the market, trying to tempt buyers this week with yields of 6%-7%+ for London, Dublin and UK regional office buildings.
As many investors sit back and observe how offices are trading, Columbia Threadneedle hopes buyers will bite for a London portfolio with strong ESG credentials, while a regional office investor is selling a Newcastle headquarters let to corporate Verisure. IBM put one of its Dublin campuses plus adjoining land on the market, and WeWork would like to raise cash from one of the London buildings it bought in its previous dash for expansion as it now scales back.
The largest deal closing this week is ChinaChem completing its acquisition of prime London office One New Street Square for £349.5 mln, from UK Reit Landsec.
In the debt capital markets there was a rare new issue last week - but from one of the highest-rated, top-tier credits in the sector, Prologis, via Prologis Euro Finance backed by its US parent.
The logistics giant placed a two tranche issuance raising €1.25 bn at margins of 120-175bps which included €650 mln of 20-year money, taking advantage of the inverted yield curve with cheaper rates for longer-term finance. It is only the second new eurobond issuance since Vonovia issued €1.5 bn of bonds last mid-November, and analysts commented that Prologis’s success is unlikely to open the market to second-tier issuers yet.
We also track three managers raising new capital and the rest of the new debt financings and the latest deals closed.
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