JPMorgan buys £557m core London asset

The Wall Street bank which houses property funds in its Global Real Assets Group, has bought the Bishops Square office complex in London’s financial district for its funds’ core property portfolio

Institutional investors’ penchant for buying core property in Europe’s capital cities is showing no signs of abating after JPMorgan became the latest investor to announce a significantly large office acquisition in central London.

The Wall Street bank, which manages property funds within its Global Real Assets Group, has bought Bishops Square for £557 million (€652 million; $870 million) in London’s financial heartland from a joint venture between Oman Investment Fund and UK property company Hammerson. The investment reflected a net initial yield of more than 6 percent.

Oman owned a 75 percent stake in the 871,000-square-foot asset, whose main attraction is a long leasehold interest in office space that is the global headquarters of law firm, Allen & Overy. JPMorgan purchased the asset on behalf of two institutional investors, although it declined to reveal them.

Pete Reilly, head of JPMorgan Asset Management’s European real estate group said: “We remain bullish on investing in high-quality, well-tenanted office properties located throughout Europe’s most important cities and this acquisition represents a further expansion of our funds’ core property portfolio in Europe. Hammerson’s development of Bishops Square is an excellent, modern headquarters with a long-lease to a single blue-chip tenant so fits our criteria perfectly.”

Hammerson said it was capitalising on the market recovery of the last 15 months.