Ivanhoé Cambridge and TPG, a leading global private investment firm, announce the acquisition of Woolgate Exchange, a high-quality office building located in London's business district. The transaction represents an investment of £265 mln (approx. CA $400 mln), bringing the total investment in London for Ivanhoé Cambridge to more than £400 mln (approx. CA $650 mln) over the past 12 months.
The 351,000 ft² (approx. 33,000 m²) trophy asset is located in the heart of the City of London, close to the Bank of England, and has been acquired through a complex and innovative financial structure. Ivanhoé Cambridge is co-investing with TPG which has originated the transaction. The asset will be co-managed by the joint venture.
In 2012, TPG entered into an agreement to acquire the junior loan from the Irish Banking Resolution Corporation. By working with the senior and junior creditors the partnership was subsequently able to acquire the asset in a proprietary transaction. Previously, the asset was held in a defaulted capital structure.
The purchase will partially repay the junior loan secured against the building, fully repaying senior bondholders. Woolgate Exchange is situated on a 1.6 acre (approx. 0.65 ha) freehold site with three underground levels, a ground floor and eight upper floors. The asset is currently 100% leased to Portigon AG, with high-quality sub-tenants including Investec Asset Management, Sidley Austin and the University of Chicago.
"Woolgate Exchange is among the outstanding assets in the London market, whose value can be optimized with the combined expertise of TPG and our teams," said Daniel Fournier, Chairman and Chief Executive Officer of Ivanhoé Cambridge.
He continued: "Based on our strong European asset portfolio valued at more than Cdn$6B, which we are currently repositioning, and our knowledge of the London market, we are building a platform with the intention of opening an office in London."
"This investment is perfectly in line with our strategic positioning in London," added Mr. Fournier. "We are convinced that it will generate attractive returns for our depositors."
Kelvin Davis, TPG Partner, said: "This innovative transaction again highlights our ability to source and execute quality property investments through complex CMBS restructurings. We believe there will be a number of other similar opportunities throughout Europe in the years ahead. TPG is fortunate to have a great partner in Ivanhoé Cambridge, with whom we collectively bring extensive experience in real estate investing and asset management."
Source: Headland Consultancy