Global real estate investment company Kennedy Wilson has acquired One Embassy Gardens in London for $252 mln (€212 mln) in an off-market transaction with developer Ballymore.
Located in London’s Nine Elms district, the 156,000 ft2 (14,500 m2), recently developed, Grade A office building has been awarded BREEAM Excellent certification. Kennedy Wilson said the acquisition was expected to add $12 mln in annual net operating income (NOI).
The asset is 82% occupied by publisher Penguin Random House, with 8.3 years of term on the lease and a two-year rental guarantee from the vendor on the vacant space.
Mike Pegler, head of UK for Kennedy Wilson, said: 'One Embassy Gardens represents an excellent opportunity to recycle proceeds following the recent opportunistic sale of our central London office asset, Friars Bridge Court, where we sold at a capital value of £1,600 per ft2 and a cap rate of 3.5%.
'We are now buying new modern stock at £1,140 per ft2 and cap rate of 4.5%, adding $12 mln of day-one NOI to Kennedy Wilson with ongoing growth prospects as the area becomes more established and rents converge to levels similar to other Central London submarkets.
'One Embassy Gardens is a high-quality, green-certified asset of scale with a secure income stream within one of the fastest-expanding submarkets of central London and it is set to further benefit from the ‘tech-clustering’ effect when Apple opens its HQ in 2022.'
One Embassy Gardens is part of the wider Embassy Gardens estate, a new riverside district immediately adjacent to the U.S. Embassy and close to Apple’s new 500,000 ft2 headquarters at Battersea Power Station.