German closed-end funds continued to feed their appetites for City property with two £100m-plus purchases this week.
Vincent Tchenguiz’s Consensus Group has found a buyer for the last remaining building from the Challenger portfolio, which it bought last year for £300m. SachsenFonds, a closed-end subsidiary of Landesbank Sachsen Group, is poised to buy the 155,000 sq ft Senator House on Queen Victoria Street, EC4, for £105m, a 6.5% yield.
The building is the headquarters of law firm Eversheds. Gerald Eve advised Consensus.Knight Frank acted for SachsenFonds.
Meanwhile, a debuting German closed-end fund has stepped in to take open-ended fund Difa’s 20-storey tower at 6-8 Bishopsgate, EC2. KGAL is buying the 143,000 sq ft building for £107m, reflecting a 6.25% yield.
HypoVereinsbank subsidiary Blue Capital Europa Immobilien had been interested in the tower.
The deal would have been Blue Capital’s UK debut, but fell through over concerns about two neighbouring proposed towers Difa’s Bishopsgate Tower and British Land’s 122 Leadenhall Street, EC3 and how they would affect its rights of light.
The fund later entered the UK with the purchase of Great Portland Estates’ 90 Fetter Lane, EC4, for £37.3m, a 6.25% yield.
A source said: “Blue Capital just changed its mind over its investment strategy. It can sometimes happen with funds. They will say: ‘We want multilet buildings at small lot sizes,’ while negotiating on a single-let building valued at £200m.”
Difa is advised by Savills. Hargreaves Goswell Down advised KGAL.
Also this week, Invesco Real Estate bought the long leasehold of the 44,500 sq ft 125 Wood Street, EC2, on behalf of Munich-based fund iii-BVK Europa-Immobilien-Spezialfond. It paid an overseas client of Wharton Asset Management £29.1m, an 8% yield.
Strutt & Parker advised Invesco. Andrew Mayer Tyser advised Wharton.
References: EGi News 07/10/05
