Gaw Capital buys London office property

Gaw Capital Partners has acquired the Milton Gate office complex in London for around £198 million on behalf of a Chinese life insurance group. 

Gaw Capital Partners, the Hong Kong- based private equity real estate firm, has acquired a landmark office complex in London on behalf of a Chinese institutional investor, making it the firm’s second commercial real estate transaction in London within the last six months. 

PERE has learned that the purchase was made on behalf of the Chinese insurance group Taikang Life Insurance. The total value of the deal is understood to be around £198 million ($300 million; €251.99 million), with the net initial yield estimated to be 5 percent.

Milton Gate is a Class A office building located in central London, covering 204,500 square feet of office space. It is fully leased to a UK law firm, with an annual rental income of £49.71 per square feet. The building was put up for sale by global investment firm AGC Equity Partners in May last year, with Savills handling the deal.

The purchase marks GAW Capital’s sixth acquisition in London made on behalf of Asian institutional investors. Last September, the firm led a group of Korean investors, including the Korean Teachers’ Credit Union, to acquire the Exchange Tower in London for £191 million. The seller of the 490,000 square foot office redevelopment site was BlackRock, which had acquired the asset via its BlackRock Europe Property Fund in 2010.

This deal also represents the Chinese insurer Taikang Life Insurance’s debut acquisition in the UK, adding to a growing list of Chinese and Taiwanese insurance companies making real estate buys in overseas markets. Taikang, which was founded in 1996, currently holds RMB 440 billion ($70 billion; €59.35 billion) worth of assets.

GAW Capital did not comment on the deal.