London Commercial Properties – Deal of the Year

The commercial property deal of the year in London has been made by JP Morgan Asset Management, which has purchased a key building from Hammerson PLC and the Oman Investment Fund (OIF).

The Bishops Square Holdings Limited office complex was sold to JP Morgan as part of a 25 / 75 joint venture by Hammerson, the FTSE 100 property company, and the Oman Investment Fund, an Omani government investment firm. The building was purchased for a record breaking £557 million.

Hammerson originally purchased its share in the complex from the City of London three years ago in 2007, then sold off seventy five percent to the Oman Investment Fund in the June of 2009. The complex was previously valued at around £510 million just six months ago in June.

The commercial property is currently the headquarters of the law firm known as Allen & Overy and comprises of 825,000 square feet, 40,000 of which is retail space. An astonishing 774,000 thousand square feet is set out as executive office space. Income from the rental of the retail and executive office space in the complex amounts to around £35 million per year, with the average rental price of the space costing £43 pounds per square foot.
The Bishops Square complex, which is situated next to Spitafields Market, was designed by Foster & Partners and has already been the recipient of several highly coveted industry awards, including the Best Commercial Led Regeneration Property of the Year in 2006 (the development was completed in 2005 as a part of a general regeneration of the Spitafields area as a whole), and the British Urban Regeneration Award in 2008.
“We remain bullish on investing in high quality, well tenanted office properties located throughout Europe’s most important cities,” says the head of JP Morgan Asset Management’s European real estate group, Peter Reilly. “This acquisition represents a further expansion of our funds’ core property portfolio in Europe… Hammerson’s development of Bishop Square is an excellent, modern headquarters with a long lease to a single blue chip tenant (and) so fits our criteria perfectly.”

“This disposal fits with our strategy of creating value though portfolio management,” says the chief executive of Hammerson, David Atkins. “We retained a stake in Bishops Square after the sale to Oman Investment Fund and have worked well together on the joint venture. We are capitalising on the market recovery over the last fifteen months and Hammerson has released funds for investment into other office and retail developments and acquisitions.”

Hammerson and the Oman Investment Fund were advised during the sale by Clifford Chance and Jones Lang LeSalle, while Berwin Leighton Paisner and Deloitte advised JP Morgan Asset Management.

Hammerson is a premier real estate company in Europe that operates largely in the retail area. JM Asset Management serves as an independent discretionary funds management service, while the Oman Investment Fund focuses on finding appealing investment opportunities in the private equity market.

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