Korean Investors

Attracted by the British capital’s high investment returns relative to risk, South Korean’s wealthy institutional investors are eyeing Prime Office buildings in London.

With the combination of relatively long leases, high liquidity and higher yields, Korea’s cash rich pension funds and insurers have been targeting Europe’s commercial property market in a bid to diversify their growing wealth reserves beyond their shores.

The state -run National Pension Service is the worlds fourth largest pension fund with more than $300bn of assets, has invested some Won6.7tn ($5.67bn) in overseas properties and has reported an annual return of 12% from it’s alternate investments including real estate.

Jun Kwang-Woo, the funds chairman is also the man responsible for snapping up HSBC’s Canary Wharf Headquarters in London, Berlin’s Sony Centre, a shopping centre near Paris and an office building in Sydney, to name a few.

With their assets under management continually growing and their domestic market being deem too “small”, investing abroad is their only option, says Nam Jae-woo, researcher at the Korea Capital Market Institute.

He goes on to state that the fact that overseas bonds generate too low returns and investing in emerging markets are risky, alternate investments especially in the real estate market which guarantees returns of 6-7% is viewed as a wise & profitable choice.

Other pension funds and insurers who are following NSP’s lead includes –

* The Public Officials Benefit Association, a pension fund for provincial civil servants who are in the last stage of talks to buy Thames Court, a low rise building in Central Windsor for Won300bn.

* Korea Investment Corp., the country’s sovereign wealth fund, splashed out $116m in December for it’s first London building located at 1 Bartholomew Lane near the Bank of England.

* Samsung Life Insurance, South Korea’s biggest insurance who were keen on purchasing Drapes Garden, a building that houses asset manager Blackrock, fell apart over pricing issues. The property was put up on the market for £280m.

* Korea’s Teachers Credit Union, with an estimated Won20.9tn of assets is interested in snapping up a 12 storey office building in London after purchasing a $333m office tower in San Francisco through a consortium in 2010.

With the current appetite Asian investors have for London properties, analysts believe they will only increase as more valuable assets are or will be up for sale. Property consultants – Jones Lang LaSalle, reported that Asian investment in central London offices jumped 150% to £1.7bn last year, making up 16% of the total £10.8bn invested in the market.

However, some critics are quick to point out that the rush to overseas property markets could lead to losses if property prices fall further, for example – Mitsubishi Estate’s failed $2bn investment in New York’s Rockefeller Centre in 1989.

Although a repeat of that experience seems unlikely in the case of recent investments as European property prices have come down sharply, one should always be cautious when investing in overseas properties.

Guardian Newspaper HQ

German fund manager Deka has recently acquired London’s Guardian Newspaper HQ for £235 million. The property which is located in the Kings Cross area was sold to the German buyers by property agents Savills.

Savills, which acted for Deka, said Deka Immobilien’s open-ended fund WestInvest InterSelect bought the seven-storey Kings Place building from developer Peter Millican in an off-market transaction. Property consultant DTZ represented the seller.

Kings Place has about 300,000sqft of office space, houses two concert halls and art galleries and is also the head office of UK’s railways operator Network Rail.

This latest purchase is just one among the many made by wealthy foreign investors who are snapping up prime properties in London.

Chanel - Luxury Fashion Brand

Chanel, the luxury fashion house has reportedly snapped up nearly 20,000sq.ft of space for their new London offices which is situated at 158/159 New Bond Street.

The designer brand will move staff into the new base above its flagship retail space. The headquarters will be housed across floors two to four.

Chanel moved into the building two years ago after Nicole Farhi decided to transfer to new premises. It agreed to a 25-year lease at a zone A rate and last month received approval to double the size of the designer store.

Rathbone Brothers whose 15-year lease runs out in April and were the former tenants of the London offices, reportedly paid £33.50 per sq ft.

Both Bond and New Bond Street are popular with luxury retailers. Estate agents Savills noted last month that Belstaff had agreed to take a 20-year lease at 135/137 New Bond Street, paying a record rent of £3 million a year.

To be renamed Belstaff House, the Grade II-listed building will provide the fashion house with around 25,000 sq ft of space over six levels.

Hermitage Plaza - Paris

Towers are fascinating buildings that are envisioned by idealist which are brought forth into reality by a host of experts in every field and of course with a lot of financial backing.

With that, the battle to be the biggest, tallest, most outstanding man made creation in architectural history is very much alive. From the Burj Khalifa in Dubai to the Taipei 101 in Taiwan. From the the Twin Towers of Malaysia to the Eiffel Tower in France.

It seems that every year, or four, somewhere around the world, a country with potential, resources and a desire for bigger, better, taller ideas and visions, unveils it’s latest achievements for the world to behold.

Case in point – the Hermitage Plaza France. While the London Shard Tower is still under constructions, France has recently announced it’s plans to build a twin tower building that will over shadow London’s soon to be completed tower.

The upcoming London’s Shard Tower is set to become the tallest building in the EU, that is, up until France’s Hermitage Plaza is constructed. The Shard, also knows as Shard London Bridge, stands at 310m (1,017 ft) tall. This 83 storey-building which is due for completion in May this year will be dwarfed by France Hermitage Plaza, which will be completed in an estimated four years time.

Hermitage Plaza, a French project that will be designed by British architects Foster and Partners, was granted planning permission by Paris officials last week. Once completed, the Plaza, which is a 93 storey (1,075ft) high twin tower building will stand 60ft taller than London’s The Shard.

The twin building which will house offices, luxury apartment, a shopping complex and a hotel will be situated in the Western business district of La Defense.

Nevertheless, it is no match to the world’s tallest building, the 2,760-feet high Burj Khalifa tower in Dubai. Only time will tell if that will remain so for in the battle to be the tallest, one can only say that ” The sky is the limit”.

According to a research conducted by global property adviser CBRE, office’s in Central London is experiencing a positive start to 2012.Despite figures being below those in December, take-up of offices in London has climbed 38% higher compared to those last year.

Docklands saw the largest increase, with take-up jumping from 9,300 sq ft to 90,200 sq ft, boosted by the 74,700 sq ft deal by the Financial Ombudsman Service at 191 Marsh Wall.

Office availability in Central London rose marginally in January and now stands at 16.1m sq ft as more secondhand space came back onto the market. Space under offer fell to 1.82m sq ft, the lowest level since June 2009, but active requirements in Central London are well above the long-term trend at 11.19m sq ft.

Emma Crawford who is the executive director of CBRE said that space under offer has fallen but requirements are still at a healthy level and we remain optimistic that this will translate into activity in the market.

Source - Google Images

Global risk management company Aon has confirmed its intention to make 122 Leadenhall Street – aka the ‘Cheesegrater’ building – their new London headquarters by signing a pre-let for the space.

Aon will take 191,000 sq ft of office space across floors 4-13, equating to one third of the 610,000 sq ft skyscraper, upon completion of the 47-storey building in 2014.

Initially set for completion in the third quarter of 2014, construction company Laing O’Rourke has now reportedly cut its building schedule by a few months to bring the completion date forwards to the second quarter.

The Richard Rogers designed 736 ft office tower, which is being developed as part of a joint partnership between British Land and Oxford Properties, will be located on Leadenhall Street opposite Lloyd’s of London in the City, just around the corner from the Gherkin.

Its tapered glass façade has earned it the nickname of the ‘Cheesegrater’, which belies its striking appearance and elegant design.

A 30m-high atrium, public plaza and steel bracings take their place alongside other impressive features within the multi-million pound development, such as external glass lifts and a light, airy environment throughout – creating a “rare oasis within the dense urban character of the City of London”.

Commenting on Aon’s confirmed relocation, Chris Grigg, Chief Executive at British Land said – “This significant letting to a leading global business is good news for the City and demonstrates the success of our commitment to creating well located world class buildings that provide long term value to occupiers.

I am very pleased to welcome Aon to The Leadenhall Building and continuing our well established relationship with them.”

Executive Vice President, Senior Managing Director Europe of Oxford Properties, Paul Brundage, said that the deal is a “great endorsement” of their investment in the development and their partnership with British Land.

Oxford has an excellent global relationship with Aon and we are pleased to be able to expand on this in London, he added.

Robert Brown, CEO of Aon Limited, said that they are “delighted” with the property, and that it will place them “at the heart of the City’s insurance sector”.

He added – “The building’s impressive location and offices reflect our standing as the leading global professional services firm focused on risk and human capital management. The decision to move to The Leadenhall Building confirms our commitment here and offers us an ideal platform to continue to grow our business and deliver the best of Aon to our clients.”

The completion of the building in 2014 will continue the steady transformation of the London skyline, adding to other such recent additions as Heron Tower, and the newly topped out Shard London Bridge.

Keep an eye on our blog for news of future office developments and take a look at our office search for more information on office space to rent in the City, other parts of Central London or the UK.

Guardian News

The headquarters of Guardian News & Media Ltd. in London’s King’s Cross district will be put up for sale by developer and philanthropist Peter Millican, according to a spokeswoman for the property.

“The office rent-free periods have ended” and the music and arts spaces are rented on long-term leases to their operators, Kings Place spokeswoman Erica Bolton said today in an e-mailed statement. DTZ Holdings Plc is handling the sale on behalf of Millican, who completed the development in 2008, Bolton said without disclosing an asking price.

As well as the Guardian newspaper publisher’s offices, the Kings Place has two public concert spaces, bars and restaurants. The plan to sell was reported earlier by Reuters, which said the building could fetch 235 million pounds ($362.5 million), without disclosing where it got the price information. DTZ declined to comment.

Parabola Land Ltd., whose main asset is Kings Place, held investment property valued at 181 million pounds by its directors, including Millican, at the end of March 2010, according to a regulatory filing.

The property had a historical cost of 126.7 million pounds, and Parabola owed lender Eurohypo AG 132.4 million pounds at the end of the financial year, according to accounts filed with Companies House. Millican was owed 37.9 million pounds at that time, according to the filing.

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