Standard Life has pulled the sale of its 50% stake in the £460m Galaxy portfolio.
The fund manager appointed Strutt & Parker in October to market the stake in the London office portfolio, which includes the EC4 HQ of investment manager Sarasin & Partners.
However, this week Standard Life said: “After careful consideration, we have revoked our earlier decision to seek a 50:50 joint venture co-investment in our portfolio of five prime London offices, known as Galaxy.
“We have taken this decision because a number of the external factors affecting a co-investment of this type have changed recently. The original proposition would now be counter to the long-term interests of the Standard Life Investments Heritage With Profits Fund.”
In an effort to rebalance its portfolio away from London, Standard Life has sold around £350m of assets in the capital since the Brexit vote on 23 June.
The cancellation of the sale marks a growing trend of investment deals being put on hold as the London market responds to global political changes.
In the City, the sale of King & Wood Mallesons’ UK HQ at 10 Queen Street Place, EC4, has been put on hold.
Malaysian government fund Lembaga Tabung Haji instructed Savills to recoup £220m from the building in May. However, it will now have to wait until the fate of the legal firm is determined.
KWM occupies 135,741 sq ft on a lease expiring in 2025.
Mining firm Anglo American has also this week halted the sale of the London HQ of DeBeers at 17 Charterhouse Street, EC1. Oaktree Capital and Quadrant Estates had been in talks to buy the circa 110,000 sq ft building, which was to be sold with vacant possession along with 27 flats totalling 20,000 sq ft.
One option for Anglo American could be to move its London HQ to the site after its lease at Carlton House Terrace, SW1, expires in 2020. The building could then be relaunched on a sale-and-leaseback basis.
A spokesman for Anglo American said there was “an ongoing process” and the company was “exploring all options”.
While overseas capital has been queuing up to take advantage of the currency play and reduced domestic competition in the London office market, there are jitters among investors looking to sell assets without long-term income certainty.
One investment agent said he expected prices for assets with short-term income streams or limited value-add opportunities to fall or remain on hold next year.
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