Investment/finance | Costar

Hong Kong investor CC Land Holdings is to buy One Kingdom Street, the Paddington headquarters of Vodafone, for £292m.

CC Land is due to exchange contracts later today on the acquisition of the building from a joint venture between TIAA and Swedish pension funds AP1 and AP2 for a net initial yield of around 5% on the SPV purchase.

Comprising 264,898 sq ft of grade A office space over 12 floors, the building has 27,300 sq ft office floor plates.The building is fully let to occupiers including Vodafone, Statoil, Shire Pharmaceuticals, Misys and MWB with a weighted unexpired term certain of 6.8 years.

It produces a total passing rent of £14.4m pa reflecting a low average rent of £54.60 per sq ft overall.There is also the ability to significantly increase rental levels with 89% of the space subject to rent reviews in 2018.

JLL and Michael Elliott were appointed towards the end of last year to quietly market the building for £300 million, reflecting a yield of 4.73%, assuming purchaser’s costs of 1.8% and a capital value of £1,132 per sq ft.

Kieran D Cotter & Co. acted for CC Land.

Deals | Property Week

Hong Kong firm CC Land Holdings, owned by billionaire Cheung Chung-Kiu, has acquired a Paddington office building for £292m.

It has agreed a deal to buy One Kingdom Street from Cityhold Office Partnership.

The 260,000 sq ft building is home to Vodafone and Statoil and was bought by the Cityhold – a joint venture between TIAA and two of Sweden’s national pension funds AP1 and AP2 – in 2011 for around £230m.

The JV still holds around £700m of property in London, as well as a number of buildings in other European cities. In total, its portfolio is worth around €2bn.

Cheung is also rumoured to be one of the parties vying to buy British Land’s 50% stake in the Cheesegrater.

Michael Elliott and JLL acted for Cityhold and Kieran Cotter advised the buyer.

Investment/finance | Estates Gazette

Leicestershire-based Marlborough Property Co has bought a portfolio of Marks & Spencer shops in London for £122.5m.The portfolio comprises 11 M&S shops, including Camden, Chiswick, Clapham, Kilburn and Putney.

The off-market deal forms part of a sub-sale from US firm Fortress Investment Group’s purchase of Topland’s £450m M&S portfolio, which completed in September. M&S still has more than 10 years remaining on its leases and has an option to extend for a further 40 years on expiry. A number of the stores have large development potential.

Kieran D Cotter & Company acted for Marlborough; HP Four advised Fortress Group.

Investment/finance | Costar

Leicestershire based Marlborough Property Co has completed the purchase of a £122.5m core London M&S portfolio, bought as a sub-sale from Fortress Investment Group’s recent acquisition of Topland’s £410m Marks & Spencer portfolio.

Marlborough Property Co. Ltd. completes on £122.5m Core London M&S portfolio Marlborough is a wholly owned subsidiary of WA Capital Ltd., the private investment office for Will Adderley, deputy chairman of Dunelm Group plc.

The portfolio comprises 11 London/Greater London M&S stores including Camden, Chiswick, Clapham, Kilburn and Putney.

The purchase was undertaken off market. M&S has more than 10 years remaining on the leases and has an option to extend for another 40 years on expiry. A number of the stores have larger development potential.

Kieran D Cotter & Company acted for the purchaser Marlborough. HP Four acted for the vendor Fortress Group.

Topland confirmed its sale of a portfolio of 76 Marks & Spencer stores to US private equity firm Fortress, as first revealed by Costar News, last month. The property firm did not disclose the price but it is understood to be £410m. The initial asking price of £500m reflected a net initial yield of 5.87%.

Costar News also revealed that Wells Fargo has secured pole position to provide the acquisition financing for the portfolio, understood to be a senior loan at a mid-60s loan to value implying a figure of in excess of £260m.

Aviva provided the outstanding senior debt on the portfolio.

M&S sold the portfolio of long leasehold and freehold stores to Topland in 2001 for £348m as part of plans to return £2bn to shareholders. The retailer then leased the stores back for an initial annual sum of around £24.6m, continuing to trade in all of the sites.

It contains 13 prime London assets including M&S stores in Camden, Chiswick, Clapham and Putney. It stretches across 3.45m sq. ft. and has a combined annual rent of £31.35m.

Topland said the portfolio also includes some non M&S income where Topland has asset managed the portfolio to create value.

Deals | Property Week

The record for the highest capital value paid per square foot for a real estate asset in the UK has been smashed twice this week by two separate deals for jewellery stores on London’s Bond Street.

169 New Bond Street let to Piaget is the new record holder at £18,500/sq. ft.

A private UK investor has bought 169 New Bond Street, let to luxury watch and jewellery brand Piaget, for £65m, which equates to a capital value of £18,500/sq. ft. The deal for the 3,500 sq. ft. boutique store, which reflects a yield of 1.61%, represents by far the highest price paid per square foot for a UK real estate asset.

It breaks the record set earlier this week when Hong Kong tycoon Ian Ng paid more than £13,000/sq. ft. for Indian billionaire Nirav Modi’s new jewellery store at 31 Old Bond Street. Ng paid just under £40m for the 2,827 sq. ft. store, which was sold by a US investor.

The previous capital value record is understood to be around the £11,000/sq. ft. mark.

“These extraordinary sums are further evidence that certain investors are still seeking the right type of product in the West End’s luxury retail market,” one agent told Property Week.

CBRE was appointed by a Saudi Arabian family office earlier this year to seek a buyer for 169 New Bond Street on an off-market basis.

Piaget, which is owned by Compagnie Financière Richemont SA, agreed a then record retail rent of £965/sq. ft. zone A for the store in 2009. That rental record has since been broken several times and is now held by Nirav Modi, which agreed to pay £1,750/sq. ft. for 31 Old Bond Street in February this year.

Cushman & Wakefield was appointed in March to sell 31 Old Bond Street at a guide price of £37m, which reflected a yield of 2.54%.

Ng’s acquisition is his third in the London market and follows the £36m purchase of 368 Oxford Street, let to Italian lingerie store Intimissimi, in June last year. Investment activity in Bond Street, which has traditionally attracted the highest capital values in London, was somewhat subdued last year, with only one deal, the £70m sale of 139 New Bond Street, completing. That store, which was sold by antique jeweller and owner-occupier SJ Phillips to Trophaeum Asset Management, was traded at a capital value of just under £7,000/ sq. ft.

Kieran D Cotter & Co advised the buyer of 169 New Bond Street and Savills represented the buyer of 31 Old Bond Street.

Investment/finance | Offices | Estates Gazette

Helical Bar has sold Enterprise House in Paddington, W2 for £43m.

The sale to a private overseas buyer represents a 10% premium to book value and a 4% yield.

The 45,000 sq ft Art Deco building was bought by Helical in 2013 in part of a 20-year sale and leaseback deal with Network Rail.

Helical will use the proceeds in part to pay down £30m of debt.

Duncan Walker, Helical Bar’s investment director, said: “We are pleased to have sold Enterprise House, a mature asset in a strong location within central London. This disposal enables us to capitalise on the strong London market, freeing up capital to deploy into our other London opportunities, which will benefit from Helical’s expertise in extracting latent value through development, refurbishment and asset management.”

Kieran D Cotter & Morgan Williams acted for the purchaser. Tudor Toone acted for the vendor.

Retail | Estates Gazette

Aidan Brooks’ Tribeca Holdings has continued its West End retail spree with the acquisition of a mixed-use Chelsea block offering the potential for redevelopment.

The Irish retail investor has paid £14.00 million for 76-82 Sloane Avenue, SW3, an 8,000 sq ft mixed-use property which until recently was home to fish restaurant Poissonnerie, run by Peter Rosignoli.

The vacant block, which also includes three upper residential floors, has scope for re­development into a ground-floor shop with six luxury flats above.

A planning application is expected next year.

Tribeca already owns the adjoining block at 72-74 Sloane Avenue, SW3, which is leased to fashion brand Joseph.

The deal follows Tribeca’s £1bn move to take full control of its London portfolio, buying out partners across its estate on assets including the nearby Brompton Cross Estate, SW3, and Old Spitalfields Market, E1, on the City fringe.

Kieran D Cotter & Co acted for Tribeca Holdings; Miles Commercial acted for the vendor.

Deals | Estates Gazette

Meadow Partners, on behalf of the North Carolina Pension Fund, has exchanged contracts to purchase 10-18 Victoria Street, SW1, for £78.00 m – a 3.64% yield. The block, let to the government for 10 years on a low rent of £36.77 per sq ft, has potential for redevelopment or refurbishment.

Kieran D Cotter & Co advised the buyer; DTZ acted for the private vendor.

Investment/finance | Retail | Estates Gazette

A pair of prime Oxford Street, W1, retail assets have changed hands for £59m in two separate off-market deals.

Private overseas purchasers have bought number 368, let to Italian lingerie store Intimissimi, for £36m, and number 386, let to Doc Martin, for £23.00 million.

The 5,993 sq ft Intimissimi store was bought from Whithaven Holdings by a Hong Kong investor. The price reflected a 2.12% yield.

It is let to Intimissimi until 2018 at a zone A rent of £760 per sq ft, and has an ERV of £900 per sq ft.

The Doc Martin store was sold by M&G, and is let on a new 15-year lease at an £865 per sq ft zone A rent, reflecting a 2.25% net initial yield.

It sits next to a block owned by Selfridges, and has been earmarked as part of a possible wider future redevelopment site.

CBRE advised the purchaser on 368; Knight Frank advised vendor Whithaven Holdings.

Kieran D Cotter & Co and Cushman & Wakefield advised the purchaser on 386; M&G were unrepresented.

News in brief | Estates Gazette 

WP Carey has paid £230.5m – a 7.25% yield – to US hedge fund Baupost for a portfolio of 73 Pendragon car dealerships. The 1.6m sq ft portfolio makes up a third of Pendragon’s UK footprint.

Kieran D Cotter & Co represented Baupost; CBRE acted for WP Carey.

Offices | Estates Gazette

 Green Property has sold the freehold of Kings House and Queens House in Harrow, Middlesex, to Dandi Living and ICG Longbow for £23.80 million.

The deal – which includes the adjoining car park – covers the 82,000 sq ft multi-let Kings House and the 48,000 sq ft Queens House, which is mostly vacant.

Tenants at Kings House include Trillium Property GP and polling firm Ipsos MORI UK.

The deal represents a net initial yield of 4.6%.

Queens House has planning permission for change of use to 64 homes via permitted development rights.

Green Property director Michael Tapp said: “The level of interest and price achieved is a strong indication of the wider London appeal among investors and residential developers. Securing reversionary leases on more space to Ipsos MORI added significant value to the deal.”

Kieran D Cotter & Co represented the purchaser; Green Property were represented by Doherty Baines and Chamberlain Commercial.

Industrial | Estates Gazette

IPUT has bought a 325,608 sq ft Dublin warehouse off-market, bringing the Irish fund’s investment in the country’s logistics sector in 2014 to €95m (£76.3m).

The firm paid €36.00 million  – a 6.7% net initial yield – to a private UK investor for the property at Damastown business park. The shed is let to supply chain provider Geodis Logistics, with 12 years remaining on the lease. Rental income is €2.5m pa.

Over the past six months IPUT has been targeting industrial properties and has invested €95m in the asset class so far this year, producing a blended yield of 7.15% for the fund’s investors.

Assets under management by IPUT now total€1.2bn.

Kieran D Cotter & Co advised the buyer; Michael Elliott represented the vendor.