Hong Kong private equity firm Joint Treasure has emerged as the frontrunner to buy WELPUT’s 3 St James’s Square, SW1, for £140m – a 3.8% yield.
Colliers International and Strutt & Parker were instructed to sell the freehold for offers in excess of £133m.
The 55,000 sq ft property, acquired by WELPUT in 2012, was let on a short lease to Diageo then later refurbished.
It is let to tenants including LindenGrove Asset Management, Concord Resources and Lodha Developers UK.
WELPUT intended to sell the completed asset and recycle capital into major refurbishment projects including 20 St James’s Street, SW1, and into new investments.
Joint Treasure was previously slated to buy Whitefriars, 65 Fleet Street, EC4, but the deal fell through. The scheme was later acquired by JMI Properties for £160m at a net initial yield of 5.56%.
If the St James’s deal goes ahead, it will be the third block on the square that has gone to a Hong Kong buyer this year.
Chinese Estates is in talks to buy 11-12 St James’s Square, SW1, from Malaysia’s Employees Provident Fund for around £180m – a 4.25% yield.
In January, billionaire casino tycoon Stanley Ho bought the 62,000 sq ft 7-8 St James’s Square, SW1, for a record capital value of £3,425 per sq ft, or £245.9m –3.69% yield.
It is partially let to the Helly Nahmad Gallery, which agreed a record UK office rent when it took 2,959 sq ft at £185 per sq ft in April 2016.
Limited supply of grade A office space in the West End and the prime St James’s location has commanded steep rents on long-term covenants, which are attractive to overseas buyers.
The fall in the value of sterling, together with forthcoming sanctions on international purchases in China, has prompted a flurry of sales particularly to Hong Kong purchasers.
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