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.