Deals

Gaw Capital leads Korean investors in £191m London deal

In its fifth transaction in London and ninth separate account, direct investment since 2010, Gaw Capital has lead a group of Korean investors, including the Korean Teachers’ Credit Union, in the purchase of Exchange House in London from BlackRock Real Estate.

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Gaw Capital Partners, the Hong Kong-based private equity real estate firm, has continued buying in the UK on behalf of Korean investors.

The firm has forward-acquired for £191 million (€244.7 million; $311.5 million) Exchange Tower, a 490,000 square foot office redevelopment in London, on behalf of a group of Korean institutions including the Korean Teachers’ Credit Union.

It was the fifth deal advised by Gaw Capital, which on this occasion invested in the asset as well. It is also Gaw Capital’s ninth separate account, direct investment since 2010.

Exchange Tower is being sold by BlackRock, the world’s largest asset manager, on behalf of the BlackRock Europe Property Fund, which closed in 2008 on $1.3 billion of equity. The fund was raised by Europe and Asia-focused private equity real estate firm MGPA which was sold last year to BlackRock.

BlackRock acquired the asset in 2010 before undertaking a “comprehensive refurbishment” of the building, the firm said in a joint announcement on the deal. The firm also improved the occupancy of the property to 98 percent from 73 percent.

The transaction was structured as a forward sale to Gaw Capital and was agreed in April this year, in advance of completion of the works. 

Goodwin Gaw, managing principal and chairman of Gaw Capital Partners, said “As an active player in the real estate market in greater China and Asia Pacific, Gaw Capital Partners is seeing more opportunities to assist Asian Investors going overseas.”

Other notable transactions led by Gaw Capital in London include Vintners’ Place in London in 2012, the Lloyd’s Building in London in 2013 and Waterside House in Paddington London in 2013. 

Gaw said: “London is one of the key global gateway cities with high liquidity. The combination of attractive yield, trophy quality asset, and attractive long term debt, makes London a particularly compelling market for core real estate investments.”

Chris McCormack, director at BlackRock Real Estate in the UK, said: “The spread between prime and non-prime real estate across London continues to provide opportunities to generate returns for institutional investors. We are pleased to have delivered on our original business plan and achieved a significant total return during the four-year investment hold period.”