Gaw brings Korean investors to London in $321m deal

The Hong Kong-based firm has made its fourth separate account investment in London on behalf of a pool of Korean institutional investors with the acquisition of the Marks & Spencer global headquarters.

Gaw Capital Partners, the Hong Kong-based private equity real estate firm, has purchased Waterside House at Paddington in London on behalf of a group of Korean institutional investors.

The deal marks the firm’s fourth separate account purchase in London on behalf of its Asian clients, according to a firm statement.

The size of the deal was undisclosed, but PERE understands the purchase price to be around $321 million. Although the investors were also unnamed, they are understood to include the Korean Federation of Community Credit Cooperatives, Suhyup Bank and Hyundai Securities.

The 237,800 square foot Waterside House is 100 percent leased to retailer Marks & Spencer, and serves as the listed company’s global headquarters. Gaw Capital was both an advisor and a co-investor in the Waterside House deal and will be the asset manager.

The Waterside deal follows two other prominent London deals Gaw Capital has advised on this year. The other two were Ping An Insurance’s £260 million (€302 million; $388 million) acquisition of the Lloyd’s of London office building and the acquisition of Allen House, a prime residential building located on Allen Street in Chelsea, alongside Tokyo-based private equity real estate firm GreenOak Real Estate.

“These two London acquisitions build on the success we had advising the purchase of the Lloyd's of London Building,” said Christina Gaw, managing principal and head of capital markets. “There is definitely a growing demand from Asian institutional investors in safe commercial and residential real estate purchases abroad.”

Korean institutions are becoming an increasingly large component of an Asian wave of capital seeking core assets in London. In September 2012, Gaw Capital’s affiliate company Downtown Properties advised a consortium of Korean investors in the £150 million acquisition of Vintners’ Place in the City of London.

In January, Korean investors teamed up with Principal Real Estate Investors for a $95.75 million Houston office deal. In October, CBRE Global Investors bought a trophy office building in Chicago on behalf of a consortium of Korean investors led by Korea Post.

With assets under management of $7.5 billion to date, Gaw Capital Partners has just closed its fourth China-focused on its hard cap of $1 billion, its largest fund to date with an additional $25 million GP commitment to be invested alongside the fund. The firm is also preparing to launch a $500 million US-focused fund.