Gaw Teams with Korean Investors for £36M London Office Buy

Gaw Capital Partners has agreed to acquire 4 and 5 Harbour Exchange in London for GBP 36.2 million ($47 million) the Hong Kong-based private equity firm said in a joint announcement on Wednesday with vendor Clearbell Capital.

A spokesperson for Gaw Capital confirmed that the acquisition of the pair of multi-let office buildings was on behalf of a separately managed account. She described the transaction as a follow on from Gaw Capital’s GBP 191 million acquisition of Exchange Tower, also known as 1 and 2 Harbour Exchange in 2016.

Gaw Capital Partners acted as advisor and co-investor for Korean Teachers’ Credit Union and a pool of other Asian investors for the earlier deal – for buildings 1 and 2 at the one million square foot development. The spokesperson declined to disclose whether the same group of investors were behind the acquisition of buildings 4 and 5 of the complex.

Gaw Leads Latest Asian Investment in East London Complex

“As freeholders of the Harbour Exchange buildings, this acquisition will enable us to further consolidate our holdings at the estate,” said Gaw Capital Partners’ Managing Principal Christina Gaw in the latest statement.

Gaw’s investment team is paying GBP 381 per square foot for its acquisition of buildings 4 and 5 in the complex, compared to the GBP 395 per square foot that it paid for for 1 and 2 Harbour Exchange two years ago.

Following this latest acquisition, five of the office blocks in the Harbour Exchange complex totalling nearly 650,000 square feet will be owned by Asian investors, with Hong Kong’s Lee Kum Kee having purchased 3 Harbour Exchange for GBP 37 million in late 2016.

Harbour Exchange Home to Finance and Tech Providers

Harbour Exchange 4 and 5 include 95,000 square feet (8,826 square metres) of office space, which is now 83 percent occupied, according to the spokesperson. Tenants in the office blocks include a mix of financial services firms along with data centre and technology service providers.

Gaw agreed to acquire the 490,000 square foot Exchange Tower 1 and 2 from BlackRock in April 2014 and completed the transaction on 29 September 2014. At the time the deal was agreed the occupancy rate was 98 percent.

According to the Exchange Tower website, some 47,935 square feet of space is currently available, at an annual rent ranging from GBP 32.50 to 39.50. Savills is marketing space in Exchange Tower at a guide price of GBP 38.50 per square foot, while Knight Frank is marketing 4 Harbour Exchange at GBP 36.50 per square foot.

Gaw Capital was advised by Michael Elliott on the latest transaction while Gryphon Property Partners and Knight Frank acted for Clearbell.

Clearbell said that it has added five new lettings to new tenants at 4 Harbour Exchange along with new reception areas and external entrances at both buildings since acquiring the buildings in February 2014.

Harbour Exchange is a one million square foot office estate located on the Isle of Dogs, a ten minute walk away from Canary Wharf – the alternative financial centre to the nearby City of London.

More Korean Deals on the Crossrail

Canary Wharf is one of the largest stations on Crossrail, London’s latest underground line which terminates in Reading, west of London. The line was scheduled to open in December this year but has been delayed for nine months until autumn 2019.

Reading is the site of Microsoft’s UK headquarters which was recently sold to Korean asset manager AIP in partnership with Valesco for GBP 100 million for approximately 250,000 square feet spread across three buildings. According to a statement from Valesco, Microsoft pays an average annual rent of GBP 27 per square foot.

The deal is a follow on from AIP and Vaseco’s GBP 248 million acquisition of Canon Bridge House earlier this year according to media reports.