Seoul-headquartered Korea Investment & Securities has agreed to buy 70 Mark Lane, EC3, from Mitsui Fudosan for around £200m.
Knight Frank Investment Management is acting as the investment manager for KIS on the acquisition of the 181,223 sq ft office building, close to Fenchurch Street Station.
Mitsui appointed Cushman & Wakefield to seek offers in excess of £205.7m for the building in September. The asking price reflected a net initial yield of 4.5%.
Singaporean investor Ho Bee Land placed the building under offer in November but the deal did not complete and the building was withdrawn from the market.
The deal is the latest in a series of South Korean investor acquisitions of City office assets as investors seek to take advantage of the late-cycle market that is offering them favourable risk-adjusted returns. There is also less competition from Hong Kong investors due to the strength of the pound against the Hong Kong dollar returning to pre-referendum levels.
South Korea’s largest institutions have entered or completed negotiations for almost £1bn of London office buildings so far this year after investing nothing at all in 2016.
Significant deals have included Samsung SRA, the real estate investment arm of the Korean conglomerate, completing a £315m deal in January to buy 200 Aldersgate, EC1, through Savills Investment Management, for a net initial yield of around 4.5%.
The office and retail space at 70 Mark Lane is fully let, with tenants including Zurich Insurance, Miller Insurance and Crawford & Company.
The building is held on a long leasehold interest from The Mayor and Commonalty and Citizens of the City of London and The Worshipful Company of Drapers for a remaining term of circa 148 years at a gearing of 10% of rents receivable.
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