An Indonesian developer is set to sell a trophy London office just 18 months after making its debut in the capital.
Sinar Mas Land has taken advantage of 100 basis points of yield compression since June 2013 and is selling the New Brook Buildings, WC2, to UBS.
It bought the 95,000 sq ft 8-18 Great Queen Street from TIAA Henderson Real Estate for £85m – a 5.75% yield – in June 2013.
It has agreed an off-market deal to sell the property for £113m, a 4.75% yield.
One source said: “New Brook Buildings is fantastic real estate and UBS knows it can expect big rental growth in that part of London.”
The sale shows that the new wave of Asian investors, which have dominated London in the past few years, are not necessarily long-term holders of real estate.
Several major Asian funds, such as Singapore’s GIC, have surprised the market by selling London trophies including 30 Gresham Street, EC2, and the Merrill Lynch Financial Centre, EC1, in the past two years.
Located between Covent Garden and Midtown’s Kingsway, New Brook Buildings is expected to generate strong returns, with rents in Covent Garden predicted to jump from £75 per sq ft to £90 per sq ft by 2018.
Tenants at the property include consultancy ECA International and Rinkelberg Capital.
JLL and GM Real Estate are advising the vendor; Tudor Toone is representing UBS.
joanna.bourke@estatesgazette.com
