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Malaysian pilgrim fund set for £155m splash

By Paul Norman - Wednesday, July 18, 2012 13:40

Malaysian haji pilgrims fund Lembaga Tabung Haji is in talks to buy SJ Berwin’s distinctive City offices from Jaguar Capital for circa £155m, CoStar News can reveal.

Market sources this week said that the fund, which is understood to be partnered by Shariah-compliant bank Gatehouse Bank and advised by Savills, was in talks to buy the long leasehold in the 221,198 sq ft block, which is principally let to SJ Berwin on a lease expiring in December 2025.

Jaguar bought the building from Norwich Property Trust Ltd for £146.25m in 2008, reflecting a net initial yield of 5.6%.

Norwich had bought it for £145m from Blackstone in 2006, who developed the property, in a deal that at a 4.5% yield reflected a record for a large tenanted City building in that cycle.

Blackstone let 180,000 sq ft at 10 Queen Street Place, formerly known as Thames Exchange, to law firm SJ Berwin in 2004 at around £36 per sq ft.

Blackstone bought it from Scottish Amicable in 2000 for £73m and redeveloped it following a lease surrender by HSBC.

The building, close to Cannon Street station and overlooking the Thames from the north end of Southwark Bridge, was developed in the 1980s but redeveloped in the 2000s by Blackstone via a John Robertson Architects-designed makeover.

The building is noted for its 20,000 sq ft roof terrace.

LTH is the Malaysian hajj pilgrims fund board, formerly known as Lembaga Urusan dan Tabung Haji. The fund facilitates savings for the pilgrimage to Mecca through investment in Shariah-compliant vehicles.

Gatehouse Bank, the Shariah compliant investment bank, recently bought the Bridge View and Consort House in Aberdeen from Ulster Estates for £59.9m. It has a global real estate portfolio in excess of £350m.

All parties declined to comment.

pnorman@costar.co.uk