Real Estate Fund Manager.com

PROPERTY

New York-based asset manager Westbrook Partners joined forces with private clients of Jones Lang LaSalle to buy a portfolio of 20 properties in a Ł365 million (US $520 million) off-market transaction. And more is to come: the partnership has earmarked Ł865 million (US $1.25 billion) for UK purchases in total.

The mixed portfolio consisted of 20 properties, nine of which are central London offices in the City, West End, Midtown, Euston and Southwark. The new fund intends to focus on asset enhancement opportunities, and a number of the office buildings are candidates for refurbishment. Jones Lang LaSalle advised on the purchases and will be responsible for active management of the properties.
Underpinning the asset enhancement opportunities is a secure income stream, with more than two-thirds of the income stream secured for more than 15 years. The acquisition has been financed by Lehman Brothers and the German bank HVB.
Mark Morris, Head of Private Client Real Estate at Jones Lang LaSalle said: 'The portfolio provides outstanding characteristics of both long term well secured income and excellent opportunities to refurbish, develop and improve many of the properties. We have got a further Ł500 million ($710 million) to spend immediately and we are actively seeking investment opportunities as we speak.' - By Graham Parker Oct 24, 2001

Two of the Peabody private equity funds run by J P Morgan spent Ł146 million ($210 million) on a portfolio of nine central London office buildings. The vendor, Security Capital European Realty's London office subsidiary City & West End Group, has retained three development sites but otherwise the sale amounts to a liquidation of its investment portfolio.

The portfolio includes buildings in Victoria Street, Clifford Street, Wardour Street and Percy Street in the West End; Savoy Court in Midtown and Lime Street in the City. The three development sites to be retained by Security Capital are in The Strand, Savile Row and South Street but Security Capital will continue to manage the investment portfolio on behalf of Peabody.
Debt finance for the acquisition came from Morgan Stanley and the German mortgage bank Deka. The Peabody funds now have over Ł450 million ($650 million) invested in London property. In February 2001 they bought the Cutlers Gardens estate on the eastern fringe of the City of London for Ł300 million ($440 million).

The Blackstone Group bought out Irish Life’s long leasehold interest in the 266,786-sf Vintners’ Place office building, on the banks of the Thames in the City of London, for Ł15.3 million ($22.3 million). The deal follows Blackstone’s Ł105.7 million purchase of Pillar and Schroder’s interest in the building in August 2001.

Vintners’ Place was completed in 1992 and is multi-let. The main tenants are HSBC and JP Morgan Chase. A number of rent reviews are currently outstanding, but once they are settled the building is expected to produce Ł8.12 million ($11.9 million) per annum. Under the terms of its lease, Irish Life had the right to receive 10% of all rents. It bought its interest in January 2000 for Ł11.95 million ($17.5 million).
Blackstone now owns an unencumbered 138-year lease on the property from the Vintners’ Company--one of the medieval craft guilds of the City of London--subject to a head rent equivalent to 7.5% of rents receivable or Ł1 million ($1.46 million) per annum, whichever is the greater. 30 Oct 2001

London residential slowed down during 2001

Merrill Lynch & Co., Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley occupy nearly three million sq ft of London real estate and more than 2,500 new investment bankers and traders poured into Europe's financial capital in 2000 But that trend is slowing down now and for the first time in three years, the UK commercial market is showing cracks too.
British Land PLC which ranks second in the UK real estate sector acquired shares of Liberty International PLC that give it nearly 30% stake in the UK's fifth largest real estate comany in a deal valued at Ł515 million.
London-based MEPC which is Britain's fourth largest real estate invesment company, was taken over by Leconport Estates, a joint venture of General Electric Co. of US and a British Telecommunications PLC pension fund. This recently acquistion was valued at Ł1.9 billion (US $2.85 billion) in cash, plus assumed debt and it is the intention to take the companies private.
Scottish Widows beat off stiff competition from overseas buyers to bag the biggest property portfolio ever sold in Britiain. They paid ~ Ł730 million for the entire Guardian portfolio compirsing 79 properties including Covent Garden Piaza in London.