There has been an array of prime office building investment deals occurring in London, demonstrating a returning market confidence, particularly when compared to the first half of the year.
In the first half of 2010, private investment deals made up around 11% of all deals, spending £1.37 billion; however a string of recent purchases has helped to boost trust in the market and reliability in investments.
20 Grafton St, a 27,000 sq ft office property in Mayfair, has been sold for £48m to real estate firm Pramerica. It is currently occupied financial services firm Perella Weinberg Partners on a 16.5-year lease. The building was sold by O’Callaghan Properties in a deal advised by Knight Frank and Jones Lang LaSalle advised Pramerica.
Also in the West End, a 72,900 sq ft office building, namely 50 Broadway, has been sold to Asian investors for 53.7m by fund manager Pramerica. Pramerica were advised by property firm King Sturge.
Morgan Capital Partners also bought Watling Court Estate, which offers around 95,000 sq ft of office space across three buildings, in central London for one of its clients from PSA Pensions – HSBC is the sole tenant for all of the buildings. PSA Pensions were advised by Strutt & Parker.
These three deals represent separate yields of 3.9%, 6.6% and 6.5% respectively.
This increased confidence in private investments obviously shows that there is still a great deal of potential within the London office space market and should help to feed demand in the coming years.