JER Partners ('JER') and GE Real Estate ('GE') have exchanged contracts to sell 90 Long Acre in Covent Garden, London to New York based Witkoff Group and London based DCD Group for €243 million (£175 mln) reflecting an initial yield of 4.2%.
90 Long Acre is a 59,131 m², freehold, landmark, class A office building. JER and Benchmark (who was taken over by GE) bought the building in 2000. The asset has since been fully refurbished. Tenants include Scottish Equitable, Eurohypo, GMAC and Regus.
This acquisition marks the Witkoff Group's return to the London market following its joint acquisition of Shell Mex House with Lehman Brothers in 1999 and subsequent sale to Rotch. Witkoff is actively seeking further European assets to add to its growing US portfolio.
Malcolm Le May, President Europe at JER Partners said: "90 Long Acre has proved an excellent investment with value add potential. We are delighted that this transaction was able to take place."
Scott Alper, Principal for the Witkoff Group said: "We believe that Europe offers interesting active management opportunities and provides a complementary synergy with our US based business. We aggressively targeted 90 Long Acre because it offers a redevelopment opportunity similar to Shell Mex House and Witkoff's redevelopment projects in New York, in that 90 Long Acre's building to site cover is only 57%. With planning approval, the property's density and massing can therefore be significantly increased by up to 36,576 m²."
Martin Waller, Director, DCD Group said: "We are very excited in continuing to expand our relationship with The Witkoff Group and partner with them on the acquisition of 90 Long Acre. The two groups together create a synergistic partnership to execute the business plan to redevelop 90 Long Acre."
Source: JER Partners GE Real Estate