Irish put billions into UK property market
A consortium called Jaguar Capital has just acquired a Central London office building, Thames Court, for a whopping €200 million, showing a 6% yield.
The acquisition was an off-market deal sourced by CB Richard Ellis Gunne for confident Irish backers, in which Irish investors each stumped up an average €250,000 to buy into the geared purchase, in a deal associated with Anglo Irish Assurance, with lending supplied by Anglo Irish Bank.
Rents are considered low for the location, with an uplift expected in review in 2007 as London office rents show recovery signs. An equivalent Irish investment property would have a lower yield, of about 5%, it is estimated.
The Jaguar Capital deal, the single largest building purchase of the year, comes on top of half-year spending to date in Britain by Irish investors of €1.26 billion.
When two other deals, expected to be confirmed within days, are factored in, there will be close to €2 billion in Irish cash ploughed into English acquisitions since January 2004.
Continuing high rates of 9% stamp duty on Irish investments are helping to fuel the outflow of cash from this country, aided by generally higher returns.
Facing on to the River Thames by the Tate Gallery and St Paul’s Cathedral, Thames Court will give its Irish investors a 6% yield, and is “in a prime location within the Square Mile of the City of London, which is the core of the UK Financial Services industry,” said Seán O’Brien of CB Richard Ellis Gunne.
It is let to Rabobank and the Royal Bank of Canada, while neighbouring occupiers are Merrill Lynch, Sumitomo, SJ Berwin and Old Mutual.
Built in the late 1990s, Thames Court is an award wining third generation office building with almost 250,000 sq ft of accommodation.
Rental income at present is said to be Stg£8,254,720 (€12,434,076) pa, equating to an average of Stg£36 psf.
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