German asset manager KGAL Investment Management has sold the office building at 60 Gracechurch Street in the City of London to Obayashi Corporation, one of Japan’s largest construction companies.
Financial details were kept confidential, but reports suggest the property changed hands for £160 mln (€181 mln).
60 Gracechurch Street was built in 1997 and extensively modernised in 2010 before KGAL acquired it for one of its closed-end real estate funds.
With the regular fund term ending in 2025, KGAL said it began to explore the sale of the fully let 11,825 m2 property last year. The company commissioned architects PLP to draw up a feasibility study for a new high rise development of more than 30 storeys, to show potential buyers the possibilities of redeveloping the site which sits adjacent to the ‘Tower Cluster’ in the City.
‘With a targeted approach, our transaction management team found the right buyer in Obayashi Properties UK, who recognised the potential of 60 Gracechurch Street,’ said André Zücker, managing director of KGAL Investment Management.
Obayashi Properties UK director Yoshifumi Yamamoto said the deal ‘presents the opportunity in the City we have been seeking to fulfil our strategic business plan’.
KGAL was advised by Cushman & Wakefield and BCLP, while Obayashi was assisted by CBRE, Linklaters and Ernst & Young.
Stephen Pearson, executive director, Central London investment at CBRE, commented: 'Long-term investors (such as Obayashi) will always see the benefit of freehold, corner sites in the core of the City of London and prevailing market conditions create an environment to access such opportunities. Furthermore, whilst the wider market remains challenging amidst ongoing economic uncertainty, transactions continue to happen as this deal, along with the recent sale of St Katherine Docks, are testament to.'