Hong Kong-based Pacific Eagle is to make its first UK property purchase at 71 Queen Victoria Street, EC4 for around £220m – a circa 4.5% net initial yield.
The high net worth family office, which invests in and manages offices, retail and residential properties in the USA, Asia, Australia and Europe, has agreed terms to buy the 202,000 sq ft building from a private Israeli investor.
The building is held on a long leasehold expiring in October 2954, or 939 years unexpired, and produces an annual rent of £10m.
Law firm Wedlake Bell went under offer in January to take 45,000 sq ft, leaving just 31,000 sq ft on the sixth floor still available.
Rents on the lower floors are around £60 per sq ft.
A private Israeli investor bought the site, together with neighbouring 77 Queen Victoria Street, in 2007 for £135m, financed with a £100m loan from ABN Amro and £20m of junior debt from Investec.
Investec stepped in to rescue the development in 2011 when it became distressed with a new £65m loan. A £15m equity injection from the private investor allowed it to retain control.
The neighbouring 77 Queen Victoria Street has already been sold and was subsequently redeveloped by Beltane.
Savills advised the vendor; Cushman & Wakefield represented Pacific Eagle.
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