Japanese Bank To Buy £150M London Office Controlled By Lender
Sumitomo Mitsui Banking Corp. is offering to buy a 234K SF office building on the eastern edge of the City of London in a sale led by one of its lenders.
The Japanese bank has agreed a deal with Nuveen to buy One Portsoken near Aldgate for about £150M, Green Street News reported. The price represents a yield of 7.25%.
The 38-year old building was bought by U.S. investor Alfred Equities for £97M in 2017. The company then put in another £50M to undertake an extensive refurbishment.
One Portsoken is leased to two higher education providers, BPP and the U.S.’s Northeastern University, which pay rents averaging £50 per SF and generate a total income of £12M a year.
The building was valued at £220M in 2022, Mintiandi reported, but by 2023, the valuation had fallen to £155M. The building had £140M of debt against it, including a £70M senior loan from Apollo and a £20M junior loan from Nuveen.
When attempts to refinance and sell the building in 2023 failed, Nuveen bought out Apollo and prepared the building for sale itself.
Other Japanese investors, including Nomura, Mitsubishi Estate and Mitsui Fudosan, have all been significant investors in London real estate in recent years.
