US Firm Snaps Up $829 Million Of Property In London's City District

Tom Burroughes

19 June 2012

A US-listed real estate investment firm has bought prestigious office developments in the heart of London’s City financial district for a total of $829 million, making it one of the biggest property transactions in recent years.

Brookfield Office Properties bought the portfolio of premier office buildings and a development site in the City from Hammerson, the UK firm. The properties comprise a total of 884,000 square feet , acquired at an initial yield of 6 per cent. In addition, the acquisition includes a development site with in-place planning consent for an office and residential tower comprising 857,000 square feet.

The buyer is financing its purchase through the assumption of $106 million, additional property-level debt expected to be put in place prior to close, and from available cash resources, it said in a statement.

The assets:

-- 125 Old Broad Street - This is a 26-story office tower at the site of the former London Stock Exchange, which was completely redeveloped in 2008;

-- 99 Bishopsgate, - A 26-story, 339,000-square-foot office building that was redeveloped in 1995, standing next to Liverpool Street Station;

-- Leadenhall Court - A 109,000-square-foot office building located on the corner of Gracechurch Street and Leadenhall Street within steps of the Lloyd's of London building.

Brookfield has also agreed to acquire the Principal Place development site for which planning consent has been granted for a 599,000-square-foot office tower, a 51-story, 237,000-square-foot residential tower, and ancillary retail. The property is located between the Liverpool Street and Shoreditch High Street rail stations.

Additional smaller assets included in the acquisition are 1 Puddle Dock and buildings on Shoreditch High Street adjoining Principal Place.