Mirae Asset to acquire Blackstone’s London office building for $460 mn

  • 2018-05-06
Number 20 Old Bailey, right, stands close to the Central Criminal Court, left, in London, U.K., on Friday, Jan. 31, 2014. U.K. commercial real estate values rose for the eighth straight month in December as investor confidence in property grew, Investment Property Databank Ltd. said. Photographer: Chris Ratcliffe/Bloomberg

Number 20 Old Bailey (right) stands close to the Central Criminal Court (left) in London.

Mirae Asset Financial Group is set to acquire a prime office building in the City of London from the Blackstone Group for £340 million ($461 million), betting on a recovery in high-end London office buildings from the Brexit-induced slowdown.

The acquisition of 20 Old Bailey will mark the latest in a series of Mirae Asset’s property deals with the US-based investment firm which has been offloading London real estate for portfolio adjustment since late last year.

For the transaction, Mirae Asset Daewoo Co. Ltd. will inject £150 million into a private real estate fund to be launched by its affiliate Mirae Asset Global Investments Co. Ltd., according to investment banking sources on May 4. They will borrow the rest of the acquisition cost.

The securities firm Mirae Asset Daewoo is likely to resell the equity interests in the nine-story building to other institutional investors.

Blackstone bought the 22,000-square-meter property in 2013. After an extensive renovation, it filled the office space with asset management company Barings, law firm Withers and Metro bank, a UK retail lender. They have a remaining lease term of over 10 years.

In the auction for 20 Old Bailey in March, 20-odd investors around the world, including Singaporean REITs, Taiwan’s insurance companies and Australian superannuation funds, reportedly placed bids.

Driven by large volumes of international capital and several landmark deals, London office building transactions reached £4.8 billion in value in the third quarter of 2017, according to CBRE, a real estate consulting firm. Two-thirds of the figure came from Asian buyers.

Mirae Asset Daewoo has been ramping up principal investments in global real estate with an increased capital base.

In March, a consortium of Mirae Asset Daewoo and NH Investment & Securities Co. Ltd. snapped up Cannon Bridge House in the City of London from Blackstone for $340 million.

Mirae Asset’s other property transactions with Blackstone include the $780 million purchase of Hyatt Regency Waikiki Beach Resort and Spa in Hawaii in 2016, and the sale of Capital Tower in Seoul for an estimated $440 million in 2016, as well as the $65 million sale of two logistics center in South Korea in the same year.

Earlier this year, the South Korean investment group invested $95 million in a mezzanine debt on the Cosmopolitan of Las Vegas owned by Blackstone.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

Photo: Getty Images Bank