Japan’s Obayashi Corporation has bought 60 Gracechurch Street, EC3, from KGAL Investment Management.
The 130,000 sq ft office building, built in 1997, was sold by one of KGAL’s closed-end funds to Obayashi Properties UK, a wholly owned subsidiary of the Japanese construction company. Around 98.5% of KGAL’s fund investors approved the sale.
The building was extensively modernised in 2010 before KGAL bought it from Evans Randall for £115m.
KGAL began marketing the property last year, as the regular fund term ends in 2025. KGAL’s asset management team had conducted an initial feasibility study for a redevelopment of the site as 30-storey tower, designed by PLP Architects.
The site is adjacent to the City of London’s tower cluster. Obayashi was drawn to the deal by the prospect of a sizeable redevelopment.
André Zücker, managing director at KGAL IM, said: “With a targeted approach, our transaction management team found the right buyer in Obayashi Properties UK, who recognised the potential of 60 Gracechurch Street. With this transaction, we once again prove how important in-house expertise and active asset management are in the real estate business”.
OPUK director Yoshifumi Yamamoto added: “For us it presents the opportunity in the City we have been seeking to fulfil our strategic business plan.”
This is OPUK’s third investment in the UK. It also owns Bracken House, EC4, and a 75% stake in 20 Gracechurch Street, EC3.
KGAL was advised by Cushman & Wakefield and BCLP; Obayashi was supported by CBRE, Linklaters and Ernst & Young.
View investment comparables for Gracechurch Street >>
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