For the first time in almost two years, the London investment market for commercial property is showing signs of improvement. An example: the global real estate services company Jones Lang LaSalle reported a roughly 50% increase in demand from the first to the second quarter of 2009 to approximately 1.3 billion pounds sterling. Considering the terms which by now are attractive, Jones Lang LaSalle expects to see further revival of demand particularly from abroad.
One of the outstanding transactions is the sale of the modern office building at 131 Finsbury Pavement in London. IVG Investment has sold the property, built in 1999, to the Luxembourg investment company Orion Capital Partners (The Orion Income Return Partners Fund) for GBP 45.5 million (52.69 million). The financially sound purchaser has acquired the office building through a "Guernsey Property Unit Trust" which exempts the share deal from the British stamp duty. Its initial return of 7% corresponds to the current prime yield in the City of London. Jones Lang LaSalle acted as consultant for IVG in this transaction.
IVG had purchased the office building with 7,307 m² of rental space at the end of 2006 as part of the Paneuropa portfolio; the property is situated in the heart of the financial quarter of London. The main tenant whose contract will run until March 2017 - is OMX.
Technology AB, a subsidiary of the Swedish stock exchange company which has sub-let most of the property over the short term. Michells & Butler Retail Ltd. will operate a well-known wine bar on the ground floor under a rental contract which will run until 31 July 2049. The building is fully let.