Seoul-headquartered FG Asset Management and European real estate investment manager the Valesco Group have exchanged contracts on the £248m acquisition of the City office building Cannon Bridge House, EC4.
The acquisition, which marks a UK debut for the FG Valesco joint venture, has been backed by South Korean investors Mirae Asset Daewoo and NH Investments & Securities.
The asset was sold by real estate funds managed by Blackstone. The purchase price reflects a net initial yield of circa 5.2%.
Cannon Bridge House comprises 286,595 sq ft of office space split across two interconnecting buildings, the newly refurbished River Building and the Atrium Building. The property has a landscaped roof garden extending to more than an acre, one of the largest green spaces in the City of London.
The 91,698 sq ft River Building has recently undergone a comprehensive £27m refurbishment. It is fully let to tech and media companies, including the headquarters of Deliveroo.
The Atrium Building provides a further 194,897 sq ft of institutional office accommodation and is fully let to mainly financial services tenants, including Natixis and IG Group. The property has a weighted average unexpired lease term of more than 10 years.
The property is thought to have significant opportunities to enhance income, with a current average passing rent of circa £46 per sq ft.
Valesco Group chief executive Shiraz Jiwa said: “This is a landmark acquisition of a one-of-a-kind City of London office asset, which was sourced and exchanged in a matter of weeks. The investment, backed by Korea’s two largest securities houses, is a first move for both institutions in London demonstrating the appeal of prime City of London assets that combine both long income and asset management upside.”
“This is the first in a series of deployments by the FG Valesco joint venture as we target assets in the UK and mainland Europe.”
Savills and HFF advised Blackstone.
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