1 october 2018


VALESCO AND AIP TEAM UP TO ACQUIRE LANDMARK MICROSOFT UK HQ FOR £100M

  • Landmark investment secures 246,138 sq ft iconic UK campus of global giant, Microsoft

  • Builds on Valesco’s significant investment momentum in the UK market, backed by South Korean capital

  • Valesco (founded by Shiraz Jiwa) commenced its 2018 investment spree with £248m City of London purchase

The Valesco Group ("Valesco"), the London headquartered European real estate investment manager together with AIP Asset Management (“AIP”), the Seoul headquartered asset manager, have exchanged contracts to acquire Microsoft’s UK HQ campus in eading for £100 million from special servicer Solutus and FI Real Estate Management. The price represents a net initial yield of circa 6.6%. The investment is backed by a consortium of South Korean institutional investors.

The landmark freehold campus was developed by Microsoft and is let in its entirety to Microsoft Limited, the global technology company’s UK subsidiary, at an average rent of £27 per sq ft. NASDAQ-listed Microsoft Corporation is the world’s largest software company and enjoys a S&P AAA credit rating.

Comprising 246,138 sq ft of grade A office space across three buildings, the property is strategically located in Thames Valley Park which is less than three miles from Reading town centre, the closest of Reading’s three major business parks. Reading is at the centre of the Thames Valley region and has developed into a European hub for multinational corporates and acts as the UK’s “Silicon Valley” cluster for technology firms including Oracle, Huawei, Nvidia, Symantec and Verizon. Reading’s real estate fundamentals are primed to significantly strengthen due to the launch of the Elizabeth Line (Crossrail) and the associated transformational £900 million infrastructure investment in Reading station, cementing its direct access to Central London and its position as a major gateway for the UK.

The acquisition builds on Valesco’s (headed by Shiraz Jiwa) and AIP’s (formerly known as FG Asset Management and headed by Danny K.Y. Kim) substantial deployment of capital in the UK market in 2018 which commenced with the £248 million acquisition of Cannon Bridge House in the City of London, also backed by South Korean investors.

Shiraz Jiwa, CEO of The Valesco Group, commented:

“This acquisition demonstrates our ability to unlock a complex holding structure by acting quickly and having the capital available to deploy. By doing this, we have secured a prime, sought after asset in a strategically important location, which is generating high quality
income backed by an exceptional covenant. We are very pleased to be adding Microsoft to our portfolio of blue-chip tenants. The real estate fundamentals underpinning Reading are increasingly compelling and its entrepreneurial talent pool is very attractive to multinational occupiers.

“This transaction continues our commitment to the UK market where, in addition to mainland Europe, we see strong potential to further deploy capital to deliver value for our investors.”

BNP Paribas Real Estate advised Solutus and FI Real Estate Management.