KanAm Grund has found its white knight in two sovereign wealth funds from the Middle East and Asia which have splashed out hundreds of millions of euros to buy four prime real estate assets in London and Paris. In early March KanAm signed the deeds on One Exchange Square and 90 High Holborn in London, two of a four-asset London office HQ portfolio the fund manager put on the market in late 2011 as part of Grundinvest's EUR 6 bn liquidation.
KanAm Grund has found its white knight in two sovereign wealth funds from the Middle East and Asia which have splashed out hundreds of millions of euros to buy four prime real estate assets in London and Paris. In early March KanAm signed the deeds on One Exchange Square and 90 High Holborn in London, two of a four-asset London office HQ portfolio the fund manager put on the market in late 2011 as part of Grundinvest's EUR 6 bn liquidation.
Frankfurt-based KanAm Grund had been in talks with the Malaysian investment fund Permodalan Nasional Berhad (PNB) about the entire package at the beginning of the year but eventually decided to go forward with just two of the assets. Financial details were not disclosed, but sources say the price came in very close to the assets’ market value of EUR 570 mln.
One Exchange Square, located in London's City financial district, houses the headquarters of the European Bank for Reconstruction and Development, and offers 35,650 m2 of usable space let to 2022.
90 High Holborn, situated between the City and the West End, is leased to UK law firm Olswang Solicitors. Built in 2002, it offers 17,000 m2 of fully let office accommodation. Some 200 m2 of retail space is leased to Starbucks Coffee and telecoms provider Orange. Following the deal, Grundinvest's UK portfolio has been reduced to Deutsche Bank's UK base on London Wall and Thomson Reuters’ office block in Canary Wharf.
Andrew Sim, head of European investment at Knight Frank which advised KanAm on the deal, said it shows that the harnessing of fresh international capital 'is crucial for the health' of the European investment market. ‘London remains the primary target for the majority of new sovereign wealth and state pension funds and in this regard PNB is certainly one of the most important new entrants,' Sim commented. The acquisitions are the second and third to be carried out by the Malaysian fund in London following the £350 mln purchase of 1 Silk Street from US investor Beacon Capital earlier this year. PNB - a EUR 47 bn unit trust manager that invests on behalf of Malaysia’s indigenous Bumiputera people - currently owns a EUR 1 bn office portfolio in the UK capital.
The deal in depth article appears in the April edition of PropertyEU Magazine. Click on the link below to order your copy now
