Malaysia’s Kumpulan Wang Amanah Pencen has joined the rush of investors selling large City offices as a string of other Asian buyers in London start to have second thoughts on deals.
KWAP is preparing to sell 88 Wood Street, EC2, the 247,000 sq ft Rogers Stirk Harbour + Partners-designed office block it bought for £215m – a 5.8% yield – through Deutsche Asset and Wealth Management in 2013.
The anticipated sale comes after the Malaysian government told institutions to sell overseas assets and reinvest capital domestically to help the economy and shore up its ailing currency, the ringgit.
KWAP chief executive Wan Kamaruzaman Wan Ahmad confirmed last month that the fund was working on selling an overseas property in part to “help fulfil the government’s recent measures”.
“We will undertake other necessary measures to identify and prioritise the sale of our foreign investments that best benefit the fund as well as facilitate subsequent reinvestments in other profitable and commercially sound investments, especially those in Malaysia,” he added.
Other Malaysian investors, including EPF, have also recently put large London assets up for sale, despite concerns about the volume of major assets on the market.
One senior City agent said: “The market is at saturation point. Too many £200m-plus assets are for sale, but there is a limited number of investors capable of buying these assets, so some will not sell.”
The concern about the volume of available stock will compound fears sparked by a series of deals involving Asian buyers that have hit hurdles.
Singapore’s Temasek has withdrawn from a joint venture purchase of the Blue Fin building, SE1, with Oxford Properties. The Canadian investor will now have to complete the £465m purchase on its own or bring in a new partner, which it could do either pre- or post-completion.
Talks between China’s Anbang Insurance and the owners of the Heron Tower, EC2, have also hit difficulties. While the £750m deal is still under consideration by the insurer, agreeing a price suitable to both parties has become increasingly fraught.
The £190m sale of Thames Court, EC4, by Korea’s Public Officials Benefits Association via CBRE Global Investors is also understood to have stalled.
The building had been expected to sell to another private Asian purchaser earlier last month.
EC3 opportunity
The billionaire Livingstone brothers are preparing to sell a £300m development opportunity in the City of London’s insurance district.
JLL has been appointed by Ian and Richard Livingstone’s London & Regional to sell Emperor House, EC3, which has consent for a 196,000 sq ft office scheme. The site, which is currently occupied by 35-36 Vine Street and Roman Wall House at 1-2 Crutched Friars, will be offered for sale for £40m.
The Hopkins Architects-designed scheme was approved by the City last year after previous proposals for the site were rejected.
jack.sidders@estatesgazette.com
