Private equity real estate investor MGPA is in exclusive negotiations to buy a trio of Docklands buildings at South Quay Plaza, E14.
The investor is in the process of drawing up heads of terms with private equity firm CIT for the 383,000 sq ft estate.
DTZ was instructed to sell the buildings in April, quoting a guide price of £95m, representing a net initial yield of 10% and a capital value of £245 per sq ft.
The deal is MGPA’s second foray into the area in recent years. It acquired the nearby Exchange Tower from Hammerson for £134.6m in 2010.
South Quay Plaza’s principal tenant, the Financial Ombudsman Service, is set to move out later this year and is under offer for 150,000 sq ft at Exchange Tower.
The financial regulator, which accounts for more than 40% of South Quay Plaza’s £10m pa net income, had a staff of 1,500 at the start of the year but is set to increase this to 2,500 in the coming months to deal with the increased workload created by new regulation and the mountain of PPI claims.
With South Quay Plaza’s principal tenant set to vacate, it paves the way for a range of asset management options, including a partial redevelopment, expected to focus on South Quay Plaza II.
DTZ acted for CIT; CBRE and Cherryman advised on Exchange Tower.
Jack.sidders@estatesgazette.com
