A 75% stake in British Land’s Paddington (BLP) Central Office Complex in London has been purchased by the Singaporean sovereign wealth fund GIC for 694 million pounds ($885million). This is a sign of increasing Asian investor interest in European real estate assets.
On Monday, British Land stated that the transaction would be completed in three months. It includes four existing office buildings located on Kingdom Street and Sheldon Square and a site for development. GIC will own 75% of the property, while British Land will hold 25%. British Land is a real estate investment trust that lists on the London stock exchange.
“We are happy to invest in Paddington Central,” Lee Kok Sun (chief investment officer for real estate at Singapore-based GIC) said. It is mainly situated with easy access to national rail services and critical transport links to Heathrow and West London. Broadgate was our previous investment, and it has shown the value of central London campuses. We are confident that this asset can generate long-term resilient returns.
GIC and British Land owned the 13-story office building at 5 Broadgate. It was then sold to Li Ka-Shing’s CK Asset, a billionaire, for 1 billion pounds. Last month, CK Asset sold the property to South Korea’s National Pension Service for 1.2 billion pounds. It serves as UBS’ London headquarters.
Simon Carter, British Land CEO, stated that “We are thrilled to partner with GIC again” and that the second joint venture with them “demonstrates the success of both our relationship at Broadgate and the quality of the assets and the opportunity at Paddington central.”
British Land announced that it would continue to manage Paddington Central’s assets through the joint venture. The asset manager has earned a total property return of over 9% annually since 2013. British Land’s Novotel Hotel, which has 206 rooms, on 3 Kingdom Street, and the development site at 5 Kingdom Street are not included in this new partnership. However, GIC can acquire stakes in either asset.
Singaporean investors have been buying prime London office properties. Ho Bee Land, owned by billionaire Chua Thian Poh, agreed to purchase
Tracy Stroh stated a return demand for office space in high-quality locations.