FG Asset Management and The Valesco Group have exchanged contracts on the acquisition of Cannon Bridge House in the City of London for €282.4m (£248m). The deal was backed by Mirae Asset Daewoo and NH Investments & Securities. The seller was real estate funds managed by Blackstone and the purchase price reflects a net initial yield of circa 5.2%.
Cannon Bridge House, London EC4, provides 286,595 ft² (26,626 m²) of office space split across two interconnecting buildings, the newly refurbished River Building and the Atrium Building. The property provides a spectacular landscaped roof garden extending to over an acre, one of the largest green spaces in the City of London, offering views across the Thames which encompass Tower Bridge, The Shard and St Paul’s Cathedral.
The River Building comprising 91,698 ft², has recently undergone a comprehensive €30.7m (£27m) refurbishment to produce a dynamic office environment that maximises its warehouse heritage and is 100% let to tech and media companies including Deliveroo.
The Atrium Building provides a further 194,897 ft² of institutional office accommodation and is 100% let to tenants predominantly in the financial services sector including Natixis and IG Group. The property has a WAULT in excess of 10 years.
The property provides significant opportunities to enhance income, with a current average passing rent of c. €52.4 (£46) per ft², whilst the prime micro-location is undergoing continued renaissance following the completion of the new iconic Bloomberg HQ.
Shiraz Jiwa, CEO of The Valesco Group, commented: “The joint venture between FG and Valesco allows us to marry compelling and unique European real estate assets with the highest quality international institutional investors, underpinned by a meticulous approach to underwriting and execution. This is a landmark acquisition of a one-of-a-kind City of London office asset, which was sourced and exchanged in a matter of weeks. The real estate fundamentals for Cannon Bridge House are unique and will be brought to bear over our holding period. This is the first in a series of deployments by the FG Valesco joint venture as we target assets in the UK and mainland Europe which offer future upside based on a rigorous analysis of the underlying real estate fundamentals.”
