Grosvenor sells Midtown trophy to China’s BCDH

By James Buckley - Thursday, January 12, 2017 8:07

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Beijing Capital Development Holdings is making its second property acquisition in London in as many months with the acquisition of Fleet Place House in London’s Midtown, CoStar News can reveal.

Grosvenor Europe instructed BNP Paribas Real Estate to sell Fleet Place House for in excess of £92.5m in October. It is thought BCDH, advised by Savills, has agreed a deal at around the guide price.

The long leasehold interest in the block at 2 Fleet Place was put up for sale for a net initial yield of 5%, reflecting a capital value of £1,006 per sq ft.

BCDH is buying the 180-year leasehold interest in the property, which is let off average rents of £51.22 per sq ft. Fleet Place House has a weighted average unexpired lease term of 6.38 years.

Grosvenor bought Fleet Place House in 2013 from German family trust AM Alpha on behalf of the Grosvenor London Office Fund for £68m, a net initial yield of 5.9%.

The 92,000 sq ft property on Holborn Viaduct comprises 87,000 sq ft of office space and two shops at street level and is multi-let to tenants including Samsung and BT.

Last month, BCDH agreed terms to buy 30 Crown Place, the headquarters of law firm Pinsent Masons, from Korea’s Samsung Asset Management for around £210m, reflecting a yield of 4.2%, as revealed by CoStar News.

The price reflected only a marginal discount on the £220m – or 4% - quoting price, reaffirming London’s continued appeal to international investors.

It is understood there were five bidders for the property, all overseas. Singaporean group UOL, and German fund managers KanAm and Deka all looked at the building, as did Hong Kong investor Kingboard prior to its £271m acquisition of Moor Place.

Last October, Beijing Capital Development Holdings agreed an off-market deal to buy Friary Court from German closed-ended fund manager HIH Global Invest. BCDH paid around £67m for the 75,000 sq ft office building, which reflected a net initial yield of 4.5%.

Beijing Capital Development Holding develops and manages real estate in China, the United States, the Americas, Australia, Netherlands, and, more recently, Europe.

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