Swedish pension fund Första AP-fonden is making its debut in the UK with the purchase of a 265,000 sq ft office block in Paddington, W2.
The fund is in advanced talks with Aviva Investors and German fund Union Investment to buy One Kingdom Street for close to its £236m asking price – a 5.75% yield.
Första is understood to have outbid a number of other overseas investors for the Sheppard Robson-designed building, including Hong Kong-based private equity fund manager Gaw Capital Partners, a North American investor and a Malaysian fund.
According to Cushman & Wakefield, overseas buyers made up 30% of all West End investors in Q3. Bill Tyser, head of City investment, said: “London remains a stable, easy and relatively cheap market for many international investors.”
Aviva and Union put the three-year-old property, which forms phase two of Development Securities’ PaddingtonCentral scheme, up for sale in the spring.
The block is fully let to tenants including Vodafone, energy firm Statoil, and software company Misys, which took 74,000 sq ft on a 15-year lease in June 2007 for around £55 per sq ft.
Första is one of Sweden’s largest state pension managers and has more than SEK218bn (£21bn) of assets under management around the world, including around £1.6bn in real estate.
CBRE and Savills are advising Aviva and Union; Jones Lang LaSalle is acting for Första.
joanna.bourke@estatesgazette.com
