Quartet of trophies in London trade for nearly $1.4bn

Four deals totaling approximately $1.4 billion and centering on five office properties in London took place over the past few days, with foreign institutions as the buyers.

It appears as though the property sales frenzy in London continues in 2013, with four additional office transactions totaling nearly $1.4 billion taking place in the city over the past few days. 

Indeed, news broke today that the Kuwaiti government has acquired 5 Canada Square, located at London’s Canary Wharf, from private equity firm Evans Randall for nearly £385 million (€448 million; $608 million) and that Samsung Asset Management – in its UK property debut – has entered into an agreement to buy 30 Crown Place in the City of London from German closed-ended fund manager Hannover Leasing for £145 million.

88 Wood

Meanwhile, Malaysian state pension Kumpulan Wang Amanah Pencen (KWAP) reportedly has won the bidding for 88 Wood Street, acquiring the property from Rockspring Property Investment Managers for $357.2 million. And, late last week, global private equity firm Global Asset Capital (GAC) agreed to purchase 1 and 7 Westferry Circus at Canary Wharf from TIAA-CREF for a total of $211 million. 

Earlier today, a report from CoStar News revealed that the Kuwaiti government bought 5 Canada Square through its real estate arm St. Martins Property. The 14-story asset is located in Canary Wharf, adjacent to the London Underground, Dockland Light Railway and future Crossrail stations. It is leased to Credit Suisse International on a 25-year lease, with 10 floors sublet to Bank of America on a 15-year lease.

Private equity group Evans Randall initially purchased 5 Canada Square in July 2007 from Royal Bank of Scotland for £452 million. That transaction was funded with a £354 million loan from Halifax Bank of Scotland, which was restructured in 2010 with a consortium of banks and a £40 million senior subordinated debt facility from Partners Group. 

Meanwhile, if the sale of 30 Crown Place is completed, it will represent Samsung’s first property investment in London. Various affiliates of Samsung have attempted to acquire office properties in London, but to no avail. In October 2011, Samsung Life was a frontrunner to buy Drapers Gardens before it was sold to Ginkgo Tree in 2012. It also was one of the strong bidders on Alban Gate in May 2011. In addition, Samsung Fire & Marine Insurance formed a consortium with three other Korean investors in 2011 to buy 10 Aldermanbury Square, but the deal never went through. 

Hannover Leasing bought 30 Crown Place in September 2011 from the Greycoat Central London Office Fund for £138.85 million Completed in 2009, the 198,000-square-foot property is 85 percent occupied by Pinsent Masons and 15 percent by Crown Place Financial. When Crown’s lease expires, Pinsent Masons plans take over the remainder of the building.

With regards to 88 Wood Street, KWAP was vying with German fund manager DEKA for control of the 247,689-square-foot property as late as one week ago. Built in 1998, the 18-story office tower currently is occupied by such tenants as Hewlett-Packard and National Australia Bank. Rockspring initially purchased the property in 2009 on behalf of the National Pension Service of Korea for approximately $292 million, according to data provider Real Capital Analytics.

Lastly, 1 and 7 Westferry Circus are within a three-building development on the north perimeter of Canary Wharf. Built in 1992, both properties include nine floors of office space with a number of ground floor retail units. According to RCA, 1 Westferry comprises 216,958 square feet and is leased predominantly to Texaco, while 7 Westferry comprises 179,289 square feet and is fully leased to the European Medicines Agency, a regulatory agency for the evaluation of medicinal products. TIAA-CREF initially purchased the assets in 2005 for an undisclosed price.