Toronto-based investor Brookfield is already preparing for its next set of acquisitions after swooping on Hammerson’s £518m London office portfolio.
After being unable to include the £340m One London Wall scheme, EC2, in its purchase, Brookfield has approached the City of London Corporation to buy the site before it is put up for sale through Jones Lang LaSalle.
The City Corporation will bring the site to market following the expiry of Hammerson’s option on it on 28 June.
Brookfield’s UK boss Martin Jepson – who previously ran Hammerson’s London portfolio and spearheaded the original agreement over London Wall Place – said the scheme was “dropped from the portfolio because we just didn’t have the time available”.
The site – St Alphage House – had been at the centre of tense negotiations between Hammerson and the City, with the latter keen to extract a seven-figure payout from the REIT before granting any further extension.
The parties agreed a provisional one-month deal at the end of May.
However, Hammerson announced on Tuesday that it would be allowing its option on the scheme to lapse as it would “not provide sufficiently high returns to the company”.
The site has planning permission for two buildings of 300,000 sq ft and 200,000 sq ft.
Jepson said that the acquisition of most of Hammerson’s London offices (see box) was “just the start” of ambitious expansion plans for Brookfield.
Earlier this year he said the firm was keen to build a London portfolio of as much as 5m sq ft. The Hammerson buy will add more than 1.7m sq ft, taking its London footprint to 2.7m sq ft. One London Wall would add a further 500,000 sq ft.
Brookfield has also been linked with increasing its stake in 100 Bishopsgate, the 950,000 sq ft city tower it is developing with Great Portland Estates. GPE boss Toby Courtauld said it had entered exclusive negotiations to reduce its 50% stake.
Jepson said Brookfield would seek individual opportunities away from super-prime assets in core locations in a bid to avoid the price distortions created by an influx of overseas investors.
“The Hammerson portfolio worked for us because they are good-quality assets. It presented one of the few opportunities that gave us access to a platform as a business,” he said.
GM Real Estate advised Brookfield.
Assets acquired: 99 Bishopsgate, EC2, 125 Old Broad Street, EC; 1 Leadenhall Court, EC3; Principal Place, EC2; 1 Puddledock, EC4; and Shoreditch High Street, E1
jack.sidders@estatesgazette.com
