BlackRock sells Exchange Tower to Gaw Capital

September
29

London, 29 September 2014– BlackRock has completed the sale of Exchange Tower to a group of Asian investors led by GAW Capital Partners for £191million, equating to £395 per square foot.

Acquired by BlackRock Europe Property Fund III in 2010, Exchange Tower comprises 490,000 square feet of office accommodation over 16 floors. BlackRock undertook a comprehensive refurbishment of common parts and completed a turnkey refurbishment on behalf of the anchor tenant, which now occupies over half of the building. As a result occupancy has improved to 98% from 73% at acquisition. The transaction was structured as a forward sale to Gaw Capital and was agreed in April this year, in advance of completion of the works.

Commenting on the sale, Chris McCormack, Director at BlackRock Real Estate in the UK, said: “The spread between prime and non-prime real estate across London continues to provide opportunities to generate returns for institutional investors. We are pleased to have delivered on our original business plan and achieved a significant total return during the four-year investment hold period.”

“By upgrading the facilities to give the space an ultra-modern look and feel, we have been able to attract a number of high profile tenants, as well as securing interest from long-term capital buyers such as Gaw Capital.”

BlackRock Real Estate is the dedicated real estate investment group within BlackRock and invests in strategies across the risk and return spectrum, providing access to all major property types. The business manages over $24 billion of private and public real estate equity and debt on behalf of investors worldwide in 17 offices across 11 countries in Asia-Pacific, Europe and the US. Investment structures include commingled funds, co-investments, joint ventures and customised separate accounts.

Gaw Capital Partners acts as the advisor and co-investor in this deal for Korean Teachers’ Credit Union and a pool of other Asian investors. It is the fifth acquisition in London led by Gaw Capital Partners on behalf of its Asian clients and is its ninth separate account direct investment since 2010. Other notable transactions in London include Vintners’ Place in London in 2012, the Lloyd’s Building in London in 2013 and Waterside House in Paddington London in 2013.

Goodwin Gaw, Managing Principal and Chairman of Gaw Capital Partners, said “As an active player in the real estate market in greater China and Asia Pacific, Gaw Capital Partners is seeing more opportunities to assist Asian Investors going overseas. London is one of the key global gateway cities with high liquidity. The combination of attractive yield, trophy quality asset, and attractive long term debt, makes London a particularly compelling market for core real estate investments.”

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