London’s 60 Gracechurch Street Sold For £160mil
UNITED KINGDOM – 60 Gracechurch Street, an office block fully leased by German insurer Allianz until 2026, has changed hands and the selling price is believed to be around £160 million, reported CoStar on Tuesday afternoon (15 March, SGT).
The seller of the office property located in the City of London is Germany’s KGAL Investment Management, while the buyer is Obayashi Properties UK, a fully-owned unit of Obayashi Corporation, one of the biggest construction firms in Japan. Also, Hong Kong investor Mighty Divine had been in discussion to purchase the office asset.
60 Gracechurch Street was completed in 1997 and was refurbished in 2010 before KGAL acquired it for one of its closed-end property funds for £116 million. It was divested as the fund’s term is slated to end in 2025.
While the 13-storey office building currently contains 127,000 sq ft of office space, there is an opportunity to redevelop the commercial property to substantially boost its workspace area by more than two times, while its gross development value (GDV) could nearly triple.
In fact, KGAL’s asset management team had drawn up an initial feasibility study for a £450 million office project with a height of over 30 storeys that was prepared by architectural firm PLP.
“This study helped show buyers the potential for the redevelopment of the site which sits adjacent to the ‘Tower Cluster’ in the City of London, and the prospect to create substantially more floor area than the existing asset provides,” stated KGAL.
“With a targeted approach, our transaction management team found the right buyer in Obayashi Properties UK, who recognised the potential of 60 Gracechurch Street,” commented KGAL’s Managing Director André Zücker.
“Obayashi is delighted to have been able to work with KGAL to have successfully completed this transaction. For us it presents the opportunity in the City we have been seeking to fulfil our strategic business plan,” added Yoshifumi Yamamoto, Director at Obayashi Properties UK.
In the transaction, the seller was represented by law firm Bryan Cave Leighton Paisner and property consultancy Cushman & Wakefield (C&W). On the other hand, the buyer was advised by law firm Linklaters, property consultancy CBRE, and auditing firm Ernst & Young.