A consortium of South Korean financial institutions has been in exclusive talks to buy the Canary Wharf headquarters of Credit Suisse Group in a deal estimated at 660 billion won ($589 million), according to sources with knowledge of the matter on Nov. 29.
Qatar Investment Authority (QIA) has put the property in the City of London up for sale, after it acquired the office building for 325 million pounds ($414 million) from the Swiss bank in 2012.
The Korean consortium led by a brokerage firm is seeking to raise 200 billion won in equity capital from domestic investors and borrow the remainder from abroad.
In July, Property Week reported that KB Securities Co. Ltd., part of South Korea’s KB Financial Group, agreed to buy the 20-story property at One Cabot Square for 460 million pounds ($587 million) from QIA and Brookfield.
But the sources declined to identify the brokerage company and other companies involved in the negotiations, because of uncertainty about the deal closing.
Meanwhile, a consortium of Hana Alternative Asset Management Co. Ltd. and IBK Securities have been in talks to acquire another City of London office building, One Poultry, according to IBK in September. The expected deal is estimated at around 182 million pounds.
WeWork, a shared office space provider, occupies most of One Poultry.
The decline in the British pound and attractive valuations compared to other European real estate markets have been driving South Korean institutional investors into City of London properties.
On top of proceeds of the future sale, South Korean investors are expected to earn a currency hedging premium of 0.5~0.6% point from investing in pound-denominated assets.
By Ikhwan Kim
<Edited by Yeonhee Kim>