Deals

TH Real Estate sells London office asset for £292m

The management firm owned by US investor TIAA has sold nine-story office building One Kingdom Street to a Hong Kong real estate investor on behalf of its Cityhold Office Partnership (CHOP). 

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TH Real Estate, the management firm owned by TIAA, has sold One Kingdom Street, a prime office property in west London, for £292 million ($366 million; €344 million).

The 264,000 square foot building, which is located in Paddington, was sold on behalf of TH Real Estate’s €2.2 billion Cityhold Office Partnership (CHOP) fund, which targets assets in major European cities. So far, the vehicle has acquired 16 assets, including purchases in London, Paris and Hamburg.

The firm said the deal represented a net initial yield of 4.86 percent and a capital value of £1,100 per square foot and confirmed that the buyer was Hong Kong real estate investor CC Land Holdings.

The Grade A, nine-story office building has transport links providing connectivity to London, Heathrow and the South-West. Completed in February 2008, One Kingdom Street was designed by Sheppard Robson architects and is let to tenants including Vodafone, Shire, Mysis and Statoil.

“The sale of One Kingdom Street is further evidence of the Cityhold Office Partnership seeking to realise performance once asset management initiatives have been successfully implemented. The venture will actively seek to reinvest the proceeds throughout 2017 – with a focus on gateway continental European cities such as Berlin, Munich, Paris and Madrid,” said Jasper Gilbey, fund manager of CHOP.

“We are delighted to have sold One Kingdom Street. This sale marks the end of the London disposal programme having sold the Peak in Victoria in December last year for £145 million. Efforts will now be focused on actively managing the residual £700 million London portfolio and selectively redeploying the capital into other London sub-markets,” said Peter Neal, senior portfolio manager at TH Real Estate.

In one of its most recent UK deals, in October, TH Real Estate sold a 75 percent stake in the Edinburgh St James redevelopment to APG, the Dutch pension fund manager. However, TH Real Estate retained the remaining 25 percent stake in the project on behalf of its UK Shopping Centre Fund.

For the One Kingdom Street deal, Michael Elliott, JLL and Ashurst advised TH Real Estate, while CC Land Holdings was represented by Kieran D. Cotter & Co and Addleshaw Goddard.