Hong Kong investor buys Freshfields HQ
Hong Kong-based JMI Properties has bought the City headquarters of magic circle law firm Freshfields Bruckhaus Deringer for £160m – a net initial yield of circa 5.5%.
The 230,000 sq ft block at 65 Fleet Street, EC4, was sold by Malaysia’s Employees Provident Fund for a discount of 5.9% on its original £170m asking price. It had been managed by CBRE Global Investors through a mandate granted by EPF.
Hong Kong-based JMI Properties has bought the City headquarters of magic circle law firm Freshfields Bruckhaus Deringer for £160m – a net initial yield of circa 5.5%.
The 230,000 sq ft block at 65 Fleet Street, EC4, was sold by Malaysia’s Employees Provident Fund for a discount of 5.9% on its original £170m asking price. It had been managed by CBRE Global Investors through a mandate granted by EPF.
It is understood the new owner is considering whether to carry out an office refurbishment or hotel redevelopment.
The deal is the latest example of capital fleeing Hong Kong and China in search of a secure home as expectations heighten around forthcoming controls over outgoing capital.
In January, billionaire casino tycoon Stanley Ho completed the purchase of 7 and 8 St James’s Square, SW1, for £245.9m, reflecting a record capital value of £3,425 per sq ft, and in December Chinese soy sauce and condiments giant Lee Kum Kee acquired 3 Harbour Exchange Square, E14, for £37m.
The price for 65 Fleet Street could be seen as a boon for the City market considering the block is due to be vacated by Freshfields Bruckhaus Deringer in 2021. The law firm confirmed this week it had agreed a 20-year lease at Brookfield Property Partners’ 100 Bishopsgate, EC3.
Hong Kong private equity firm Joint Treasure was close to agreeing a deal to buy the block in December for around £155m. However, the deal did not progress.
The deal highlights the central London office market’s resilience to external shocks and the strength of demand from Asian buyers. In January alone, Hong Kong investors invested more than £760m in the West End – the entire turnover of Q1 last year, according to Knight Frank.
In the City, deals with Asian investors have included Beijing Capital Development Holding’s move to buy Fleet Place House, EC4, from Grosvenor Europe for around £108m – a yield of 4.35%.
Cushman & Wakefield advised EPF; CBRE advised the buyer.
l AXA Investment Managers – Real Assets has instructed Cushman & Wakefield to sell 20 Gresham Street, EC2, for £315m – a net initial yield of 4%.
The 240,000 sq ft building is majority let to ICBC Standard Bank with reversionary rents across the building of £53 per sq ft overall, producing around £12.8m pa. Other occupiers include petrochemicals company Koch Supply & Trading and law firms Sacker & Partners and TLT Solicitors.
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