Fubon Life has placed the iconic Madame Tussauds waxwork museum under offer for more than £320m.
The leisure attraction on Marylebone Road, NW1, is being sold by Nick Leslau’s and Mike Brown’s Secure Income REIT.
The deal is the latest illustration of the weight of capital coming to the UK from the Far East and investors’ appetite for trophy assets.
Madame Tussauds, which has been on the site since 1884, is operated by Merlin Entertainments, which also runs The Dungeons, Sea Life Centre and Legoland. It is let to Merlin for another 27 years at a rent of £15.5m pa with increases in line with inflation every 12 months. As of 31 December 2014, the property was valued at £309.3m.
The deal is part of an ongoing refinancing process for Secure Income REIT, which was listed last June. The sale will reduce the company’s gearing, which stands at 70%. The company also owns 20 private hospitals and other tourist attractions let to Merlin, such as Warwick Castle, Thorpe Park and Alton Towers. Its portfolio is valued at around £1.6bn.
The purchase is the third real estate acquisition in the UK for the $75bn (£49.3bn) Taiwanese life insurer. It was part of the first wave of Taiwanese insurers to buy UK property following the introduction of rules in 2013 that permitted the company’s insurance sector to invest in real estate in a limited number of overseas jurisdictions.
It completed a £138.8m deal to buy LondonMetric’s One Carter Lane, EC4, in November last year before agreeing a deal to buy Bow Bells House, EC4, for £197.2m a month later.
Fubon is aiming to deploy around $3bn on overseas property in the next four to five years.
In Secure Income REIT’s annual report, published on 30 April, chairman Martin Moore said of the sale: “A feature of the London market has been an exceptional level of interest from overseas investors and, following a number of unsolicited approaches, in February we chose to market our freehold interest in Madame Tussauds in Marylebone Road. This is one of London’s top visitor attractions and an iconic property, available on the market as an individual asset for the first time since the business started trading on this site 130 years ago.
“While the group’s strategy remains firmly to invest in and hold for the long term high-quality assets with long-term income characteristics, Madame Tussauds is our largest asset and with the London market so buoyant we felt we must explore this sale opportunity to ensure we continue to optimise shareholder returns. If successful, the sale would improve the income return on the remainder of the portfolio.”
Secure Income REIT declined to comment.
CBRE is acting for Secure Income REIT.
