Aldgate Developments partners with Hong Kong for 18-storey tower
Aldgate Developments has teamed up with Hong Kong investor Kwong Hing Investment Group to build an 18-storey office tower in Aldgate, E1.
The partners completed a deal last week to buy US private equity firm Starwood Capital’s majority interest in One Braham, E1, for £65m. Aldgate, which had also been partnered with Starwood, will retain its minority interest.
Demolition is expected to start imminently to begin construction of the 320,000 sq ft tech and media-orientated office development, which has an estimated gross development value of £350m. The tower, which has a £200m build cost, represents a significant vote of confidence in the City office market. Cushman & Wakefield and Eastdil Secured were instructed to sell Starwood’s interest in April.
Aldgate Developments has teamed up with Hong Kong investor Kwong Hing Investment Group to build an 18-storey office tower in Aldgate, E1.
The partners completed a deal last week to buy US private equity firm Starwood Capital’s majority interest in One Braham, E1, for £65m. Aldgate, which had also been partnered with Starwood, will retain its minority interest.
Demolition is expected to start imminently to begin construction of the 320,000 sq ft tech and media-orientated office development, which has an estimated gross development value of £350m. The tower, which has a £200m build cost, represents a significant vote of confidence in the City office market. Cushman & Wakefield and Eastdil Secured were instructed to sell Starwood’s interest in April.
The planned development site next to the neighbouring Aldgate Tower, E1, which Starwood and Aldgate developed and sold to a China Life and Brookfield joint venture last year for around £350m, a 4.8% yield.
KHI has previously worked with Aldgate. The joint venture, working with the City of London Corporation delivered 21 Lime Street, EC2, a 32,000 sq ft development which has been fully let to Antares Underwriting.
KHI is a property-focused investment holding and operating group of companies. The Hong Kong-based company is wholly owned by the Fu family. Founded in 1947, it has invested in Hong Kong, the UK, China, Japan, Southeast Asia and the USA. In the UK it also owns the 2m sq ft Lunar industrial portfolio, which comprises 25 multi-let estates across the UK and is managed by South Street Capital.
Trophy office building transactions in London have dominated the first half of 2017, with 12 transactions of £100m or more in Q2, according to CBRE research. However, strong appetite is now being proven for development and asset management opportunities in order to ultimately provide new opportunities for trophy-chasing investors. More than 30 potential buyers have registered interest in Premier Place, EC2, a 244,000 sq ft City office block owned and occupied by Royal Bank of Scotland which the bank plans to vacate. Cushman & Wakefield was instructed in June to seek offers in excess of £145m for the building.
This has been underpinned by a relatively buoyant leasing market in the first half of the year despite some businesses preparing relocation plans as a result of Brexit. Take-up of office space in central London increased by 30% quarter-on-quarter to 3.3m sq ft in Q2 2017, 6% above the 10-year average, according to CBRE.
To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette
