Morgan Capital Partners ends talks to sell £145m City asset

By James Buckley - Wednesday, April 11, 2018 15:00

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Morgan Capital Partners has ended discussions to sell a prime City of London office development for around £145m to Chinese developer Beijing Zhaotai, CoStar News can reveal.

Although the building was not being marketed for sale, Zhaotai entered into discussions over a potential acquisition of the asset at 45 Cannon Street in January with the building’s owner, Morgan Capital Partners. A price of £145m was mooted, reflecting a yield of 4.1% but terms were never agreed.

However, a deal is not progressing and Morgan Capital’s Managing Partner confirmed to CoStar News today that 45 Cannon Street was not for sale, with no plans to bring it to market on either an on- or off-market basis.

Morgan Capital in understood to have received a number of approaches to buy 45 Cannon Street this year, with interest from the likes of Hong Kong investor CC Land, but has confirmed the key focus is to let the remaining two floors at the building.

Beijing Zhaotai has been keen to gain a foothold in the London property market for some time, having previously negotiated to buy 38 Chancery Lane. However, that deal did not progress either.

Beijing-based Zhaotai Group was founded in 1992 in Beijing, riding the wave urbanisation in China to grow to a conglomerate of RMB 70bn ($11.bn) of assets and over 1,000 staff.

AOG Real Estate, in partnership with its London-based asset and development manager Morgan Capital Partners, won planning consent in 2013 for a prime 90,000 sq ft office and retail development at 45 Cannon Street, EC4.

The Fletcher Priest designed development includes 81,200 sq ft of grade A offices and 8,000 sq ft of restaurant and retail space fronting Cannon Street and Bow Lane.

The previous 67,000 sq ft property was acquired in August 2010 along with the two adjoining properties at 10 Bow Lane and 19/26 Watling Street. The lease to HSBC was surrendered in December 2011.

jbuckley@costar.co.uk 

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