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It’s been a week of big deals and firsts in the UK Commercial Property Market.
Leading Eastern European commercial real estate developer, HB Reavis, has secured its first UK acquisition of 33 King William Street for £62,5 million.
The site between Bank and London Bridge is currently being rented by Blackrock until 2014. When this lease expires HB Reavis have secured planning permission to demolish the site and begin developing a 229,775 sqft Grade A office building, designed by John Robertson Architects. The project will be completed in late 2016. HB Reavis UK director Tomaš Jurdák commented: “We look forward to establishing our company as an active contributor to London’s world class real estate community.”
Meanwhile in Newcastle, the sale of the 99,899sqft Regent Point Office building is the city’s largest deal this year. The building is one of the regions largest office locations at the edge of the city centre. DTZ and Gavin Black & Partners managed the sale of the vacant property on behalf of joint receivers at CBRE, with Newcastle-upon-Tyne Hospitals NHS Trust buying the property for an undisclosed sum. “The deal is further evidence of improving sentiment in the market and it brings the supply of Grade A space within greater Newcastle to a critically low level,” said Chris Pearson, partner at Gavin Black & Partners.
Tony Wordsworth, from GVA, who acted on behalf of the trust, added: “This purchase will allow the trust to centralise a number of functions from various hospital sites and free up space for future clinical redevelopment to keep the trust as the leading provider for medical services.”
There’s another first for Apollo this week as they return to the commercial property market after a break in 2011. Ryan Hughes, Multi-Asset manager for the firm has introduced commercial property exposure to Apollo’s Cautious and Balanced funds. Hughes used existing cash holdings from these funds to enable the move, taking a 5 per cent position for both the Cautious and Balanced funds, in Fiona Rowley’s £2.3bn M&G Property Portfolio fund.
The M&G Property Portfolio is ranked third quarter in the IMA Property sector over one year, returning 4.75 per cent in the 12 months to 29 November 2013. It is also fourth quartile over three years with a 9.21 per cent gain.
Speaking about the commercial climate, Hughes commented “With the recovery in the UK economy becoming more deep rooted, we are seeing strong signs that UK commercial property is once again becoming an attractive asset class…The recovery is broadening out strongly from London into the south-east and with a shortage of high quality supply, we see signs that this is being turned into rental growth which in turn is pushing up capital values.”
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