26 march 2018


FG AND VALESCO SECURE KOREAN DUO FOR £248M CANNON BRIDGE HOUSE
ACQUISITION

  • Landmark debut investment by The Valesco Group in the UK alongside FG Asset Management in South Korea

  • Prime acquisition backed by two major South Korean investors

  • 287,000 sq ft one-of-a-kind riverside property with an acre of roof garden in the heart of the City of London

FG Asset Management (“FG”) the Seoul headquartered asset management company and The Valesco Group ("Valesco"), the London headquartered European real estate investment manager, have exchanged contracts on the acquisition of Cannon Bridge House in the City of  London for £248m, backed by Mirae Asset Daewoo and NH Investments & Securities, the investment and securities power houses operating in South Korea. The seller was real estate funds managed by Blackstone and the purchase price reflects a net initial yield of circa 5.2%.

Cannon Bridge House, London EC4, provides 286,595 sq ft (26,626 sqm) of office space split across two interconnecting buildings, the newly refurbished River Building and the Atrium Building. The property provides a spectacular landscaped roof garden extending to over an acre, one of the largest green spaces in the City of London, offering views across the Thames which encompass Tower Bridge, The Shard and St Paul’s Cathedral. The River Building comprising 91,698 sq ft, has recently undergone a comprehensive £27m refurbishment to produce a dynamic office environment that maximises its warehouse heritage and is 100% let to tech and media companies including Deliveroo’s HQ. The Atrium Building provides a further 194,897 sq ft of institutional office accommodation and is 100% let to tenants
predominantly in the financial services sector, including Natixis and IG Group. The property has a WAULT in excess of 10 years.

The property provides significant opportunities to enhance income, with a current average passing rent of circa £46 per sq ft, whilst the prime micro location is undergoing continued renaissance following the completion of the new iconic Bloomberg HQ.

Shiraz Jiwa, CEO of The Valesco Group, commented:

“The joint venture between FG and Valesco allows us to marry compelling and unique European real estate assets with the highest quality international institutional investors, underpinned by a meticulous approach to underwriting and execution. This is a landmark acquisition of a one-of-a-kind City of London office asset, which was sourced and exchanged in a matter of weeks. The real estate fundamentals for Cannon Bridge House are unique and will be brought to bear over our holding period. The investment backed by Korea’s two largest securities houses is a first move for both institutions in London demonstrating the appeal of prime City of London assets that combine both long income and asset management upside.”

“This is the first in a series of deployments by the FG Valesco joint venture as we target assets in the UK and mainland Europe which offer future upside based on a rigorous analysis of the underlying real estate fundamentals.”

Savills and HFF advised Blackstone.