Frankfurt-based fund manager KanAm Grund has gone ahead with the acquisition of One Wood Street, months after the City of London office was reportedly one of a slew of potential deals halted in the immediate aftermath of the Brexit referendum.
Aerium, the pan-European fund manager, confirmed on Thursday that KanAm had completed on the One Wood Street transaction. The financial details were not disclosed but it is believed that it traded for around £180 mln (€280 mln).
Aerium was acting on behalf of Korean insurer Hanwha Life. Robin Carr, head of UK & co-chief investment officer at Aerium, said: 'Having managed this asset for the past eight years, initially under our own ownership and latterly on behalf of Hanwha Life, we're intricately aware of its appeal as a unique investment proposition.
'With our asset management programme now having been successfully executed, we’re handing One Wood Street over to KanAm Grund Group in prime condition and with the benefit of a strong covenant providing long-term stable income, and we look forward to seeing it continue to prosper for years to come'.
CBRE was the adviser on the sell-side.
One Wood Street comprises 17,108 m2 and is fully let to Eversheds Sutherland as the law firm’s international headquarters for a further nine years. Delivered by Land Securities in 2007, the property was acquired by Aerium two years later and sold on to Hanwha Life in 2012. Aerium was retained as investment manager. Initial talks between Aerium and KanAm Grund on a potential deal took were halted following the vote in favour of Brexit last June.
Brexit blues
The major concern following the June 2016 referendum was that financial services firms and banks would flee the City of London and decamp to Ireland or continental European locations to safeguard their 'passport' access to the single market. But property investors appear in the main to have recovered quite quickly from the initial bout of jitters and, for some at least, the mantra has become 'business as usual'. By late 2016 One Wood Street was back on the market, albeit for £180 mln, representing a 5% discount to the pre-referendum price tag.
This is the third acquisition by KanAm Grund in the City of London within four months, illustrating that the British public's decision to part ways with the EU has not been a death blow for real estate investment.
Indeed, cross-border activity appears to be increasing, spurred on by the depreciation in sterling. Deka, another German fund manager, acquired Facebook’s London HQ for €509 mln in February and Hong Kong-based firms have recently been pouring capital into the market.
