City's Ropemaker prepped for £710m sale

By James Buckley - Thursday, December 07, 2017 12:06

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The tripartite joint venture that owns Ropemaker Place in the City of London is preparing to put the 600,000 sq ft trophy office development up for sale for around £710m, CoStar News can reveal.

The ownership structure, comprised of an equal partnership between AXA IM - Real Assets, Chinese investor Gingko Tree Investment and South Korea’s Hanwha Group, has instructed JLL and Eastdil Secured to launch the building - at 25 Ropemaker Street, EC2 - for sale in January.

The price reflects a net initial yield of 4.25% and a capital value of circa £1,200 per sq ft for the freehold asset which is located next to Crossrail. The yield is competitively priced when compared to the Walkie Talkie which sold for 3.44%. The agents were instructed following a competitive pitch. 

The decision to sell follows another rampant year of investment volumes in central London. Of the c.£8bn on stock that flooded the City market after the summer, the best assets have been trading at or above quoting price, confounding expectations that it would start to push prime yields out. 

Around £1.95bn is currently under offer in the City (of assets over £70m) with £5.5bn still available to buy. 

British Land sold Ropemaker Place in March 2013 for £472m - a 5% yield - to special purpose vehicles Frasia Properties S.à r.l. and Frasia Properties Subsidiary S.à r.l., which are subsidiaries of a UK Real Estate Investment Trust structure. 

At the time of the sale, British Land topped up the rent frees to the contractual rent of £24.05m pa. 

The offices are 96% let on an average lease length of 10 years, with key tenants including Macquarie Bank, occupying 168,528 sq ft; IHS Markit, which occupies 106,325 sq ft; Mitsubishi UFJ Securities International, in 101,898 sq ft; and The Bank of Tokyo-Mitsubishi UFJ, which occupies 78,000 sq ft.

All parties declined to comment.

Jbuckley@costar.co.uk 

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