Blackstone sells London office to Singaporean investor

Blackstone Group has sold the former Stock Exchange Tower in the City of London to Singapore-based City Developments (CDL) for £385 million ($493 million), according to Financial Times.

Tenants include Cushman & Wakefield, the law firm King & Spalding and China International Capital Corp.

It is CDL’s second London real estate purchase this year. The investor acquired a class A commercial building, Aldgate House, in London for £183 million ($240 million).

Savills forecasted the total investment turnover in the City of London office market could reach £12 billion ($15.4 billion) in 2018, considerably ahead of the 10-year average of £8.37 ($10.72) and only the fourth time on record that £12 billion ($15.4 billion) has been transacted in the market. This would place 2018 just shy of the all-time record of £12.64 billion ($16.2 billion) recorded in 2017, said Savills.

The latest City Investment Watch from Savills reports £582 million ($746 million) was invested in September across six transactions, taking overall investment for 2018 at the end of third quarter to £8.63 billion ($11.1 billion) in line with £8.67 billion ($11.11 billion) in 2017. However, Savills points out at the end of third quarter 2018 over £2.5 billion ($3.2 billion) of transactions are under offer, compared with only £900 million ($1.2 billion) at the same point in 2017.

Asian investors continue to account for the largest share of investment into the City, with 57 percent of total volume to date, £4.96 billion ($6.35 billion) across 20 transactions. Savills said U.K. investors lead the way in terms of number of deals, having acquired 42 buildings up to the end of third quarter 2018, totaling £1.55 billion ($1.99 billion) and representing 18 percent of total volume.

“There is undoubtedly continued demand from domestic and overseas investors, however, we believe year end turnover will be affected by a lack of available stock. At this stage last year total availability stood at over £6.5 billion ($8.3 billion), compared to current availability at the end of third quarter 2018 of only £1.5 billion ($1.92 billion),” said Richard Bullock, director in the Central London investment team at Savills