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The London office investment market is slowly stirring back to life, after a first half of the year afflicted by the nationwide lockdown.
Here are four large deals in the works that will provide an insight into investor appetite for the UK capital.
5 Broadgate
Hong Kong investor CK Asset Holdings only bought 5 Broadgate in 2018, paying British Land and GIC £1B for the 700K SF London HQ of investment bank UBS. But it thinks the market has moved on from then, when the threat of the UK leaving the EU without a deal was in the air. As a result, it is considering trying to sell the building for £1.3B, according to Bloomberg.
Paddington Central
This would be a sale that would test the appetite of investors to buy into a joint venture owning a large campus of buildings in central London. React News said that British Land is considering selling a stake of 50% to 75% in Paddington Central, the 958K SF campus in west London it owns. Paddington Central is valued at £1.3B, a 4% yield, so a sale could net between £650M and £975M. The REIT would reinvest the proceeds in development projects.
Bankside 2 & 3
Another investor looking to make a big profit on a relatively short turnaround is DWS, the asset management arm of Deutsche Bank. It has appointed agents to sell Bankside 2 & 3, the Southbank HQ of telecoms company Omnicom, for £430M, Bloomberg reported. It bought the 450K SF pair of buildings for £310M in 2017.
2 King Edward Street
Norges Bank, the giant Norwegian sovereign wealth fund, doesn’t sell real estate very often, as it is typically a long-term holder. But it is looking to shift 2 King Edward Street, the 585K SF City of London HQ of Bank of America Merrill Lynch. Norges bought the building for £582M in 2014, and in 2018 BAML extended its lease on the building to 2032, increasing the value.
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