Hong Kong investors Wing Tai Properties and Manhattan Garments have exchanged contracts to buy City of London property 30 Gresham Street for £460 million ($590 million) as part of a 50-50 joint venture.
The seller was an investment fund managed by South Korea’s Samsung Life Insurance.
The Wing Tai directors believe the acquisition by the formation of the joint venture company provides an opportunity for the group to expand and diversify its property investment portfolio and generate a steady flow of rental income to the group, according to a filing with the Hong Kong stock exchange on Nov. 22.
The asset serves as Commerzbank AG’s City of London headquarters, totaling 37,160 square meters (403,639 square feet). Another tenant includes Investec Plc. The asset comprises office and retail space, as well as a 48-space garage.
London was the destination for approximately 26 percent of Asian outbound capital during the first half of 2018, according to Emerging Trends in Real Estate Asia Pacific, published by the Urban Land Institute and PwC. Singaporean and Hong Kong investors were considered the most active in the market.
Cushman & Wakefield reported U.K. office investment fell to £4.7 billion ($6.02 billion) quarter-on-quarter during the third quarter 2018, 30 percent below the five-year average and the lowest since immediately after the E.U. referendum. The buyer profile remained dominated by overseas capital, which accounted for 65 percent of purchases; European investors accounted for more than half of all foreign buyers. Investment into London offices remained strong, with volumes exceeding average levels and overseas capital continuing to focus on large lot sizes.
