ING Real Estate Investment Managers has signalled its growing confidence that City rents will improve with a £60m property swap.
The fund manager this week bought a 40,000 sq ft City office block and disposed of 390,000 sq ft of industrial property in the deal with CBRE Investors.
It purchased 60 Cannon Street, EC4 let to US law firm Coudert Brothers until 2018 for £28.5m, a 6% yield.
At the same time, it sold six multilet industrial estates for £32.6m, a 6.3% yield. The properties are in Basingstoke, Bristol, Cardiff, Manchester, Peterborough and Reading.
A source said: “This highlights the fact that institutions are not keen to sell in this market, because it leaves them with the dilemma of where to make up that allocation.
But they are willing to swap to get access to property in areas where they see future growth. ING is keen to put money into the City and CBRE Investors wanted to buy industrial assets.”
ING is also buying the almost empty 158,000 sq ft 25 Copthall Avenue, EC2, from Morley Fund Management on behalf of the Starwood Capital fund for close to £80m.
In September, the company bought 85 Gracechurch Street, EC3, for £32m. It also bid for Milton Gate, EC2.
Michael Elliott advised ING on the property swap. CBRE advised CBRE Investors.
References: EGi News 27/06/05
