Dubai’s Easa Saleh Al Gurg Group has agreed to buy the Peak in Victoria, SW1, for £145m – a 4.27% yield.
The Middle Eastern group is buying the 100,000 sq ft, eight-storey office and retail block on Wilton Road, opposite Victoria Station, from TH Real Estate through its investment arm Wolfe Asset Management. The price paid reflects a capital value of £1,489 per sq ft.
TH Real Estate held the asset in its Cityhold Office Partnership fund – a €2.2bn pan-European office joint venture vehicle between US institution TIAA-CREF and Sweden’s AP1 & AP2.
The deal realises a significant profit for TH Real Estate, which first bought the asset for the partnership in 2012 from Heron International for £113m – a 5% yield.
There are now five remaining UK assets in the fund and one development, collectively valued at around £1bn. Properties include Belgrave House, SW1; 40 Holborn Viaduct, EC1; and 60 Great Portland Street, W1.
TH Real Estate will use the capital released from the sale of the Peak to bolster its 2017 London investment programme, which will continue to target both stabilised and value-add office opportunities in the capital.
It will consider further sales from the fund to reinvest into acquisitions. It is currently focused on deploying an additional £2bn across Europe, focusing on Berlin, Munich, Hamburg, Frankfurt and Paris.
Peter Neal, manager of the Cityhold Office Partnership’s UK portfolio at TH Real Estate, said: “We are delighted with the outcome of the sale, with the asset delivering very attractive returns for the partnership. A sale crystallises these gains and provides additional capital to allocate to the partnership’s 2017 London investment programme.”
The deal is Al Gurg Group’s third UK property venture. In September last year it bought City landmark 5 Cheapside, EC2, for £80m from Lord Sugar’s Amsprop. Al Gurg also bought the IBM Building on the South Bank from Sugar in 2013.
Abdulla Al Gurg, group general manager of WAML, said: “We are extremely proud to have purchased such an iconic building which perfectly fits our strategy of owning best-in-class office buildings in prominent central London locations.”
Earlier this month, Al Gurg Group expressed its intention to invest in UK commercial real estate, telling Middle Eastern financial publication Zawya that it was planning to look to the UK to diversify away from the slow-growing Gulf markets.
Abdulla Al Gurg said: “We think that Brexit was of value to us, because the pound has gone down by 20-25% and it has actually opened up opportunities.
“A lot of investment from Middle Eastern families has gone into the UK in the past and this is still continuing,” he said, adding that Britain was seen as “a safe haven” for Arab investors.
In July, Eastdil was instructed to refinance the UK properties in the Cityhold Office Partnership, which is still an ongoing process.
James Rood and Ed Bradley of CBRE added: “As long-term holders of real estate, the Peak will be a fantastic addition to WAML’s portfolio. The ongoing transformation and infrastructure improvements in Victoria will further enhance its future performance.”
Tenants at the Peak include Bank of Scotland, PetroChina and Guggenheim Capital.
CBRE and Taylor Wessing acted for Al Gurg Group; JLL and Eversheds represented TH Real Estate.
• To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @amberrolt or @estatesgazette
