Hong Kong-listed SEA Holdings is said to have purchased London’s Sanctuary Buildings from a Hana Alternative Asset Management-led consortium less than a year after the Korean investors bought the property from Blackstone, according to a local media report.
The consortium, which also includes Hana Financial Investment and Kiwoom Securities, has sold the landmark office property for an amount said to be close to £300 million ($389 million), as first reported by React News.
The sale price gives the consortium a slim gain on the £285 million acquisition completed in January, with the excess largely to cover the Korean investment group’s borrowing costs, according to sources cited by React News.
Local Hong Kong media has reported that the buyer is SEA Holdings. The Hong Kong-listed property group had not replied to enquiries from Mingtiandi at the time of publication.
£12.1M Annual Rental Income
Located a five minute walk from the Houses of Parliament in central Westminster, the 225,485 square foot (20,948 square metre) freehold office property is let to the UK’s Secretary of State through 2034 at a passing rent of £12.1 million per annum, representing £53.77 per square foot per year.
The Hana Alternative-led consortium is selling the eight-storey property after acquiring it last November from Blackstone, which saw the US private equity giant earning a 63 percent capital gain on the £175 million it had paid for the asset in 2014.
Hana’s quick sale comes after a spending spree by South Korean firms in the UK last year, with cross border investment from the East Asian nation into the Brexit-challenged country reaching £2.3 billion last year, according to Savills.
Hana, in particular, has been a keen buyer. Just under a year ago, the financial group completed the £185 million acquisition of London’s One Poultry, a grade 2 listed office property leased entirely to co-working provider WeWork.
Hana also last July bought the 195,000 square foot Gallagher Shopping Park in Birmingham from global investment group KKR for £175 million.
Negotiating a Brexit-Challenged UK
With the political turmoil surrounding Brexit dimming the country’s appeal as an investment destination, Hana has focused its real estate purchases this year in Europe, including teaming up with Wealthcore Investment Management just three months ago to buy the Hilton Vienna for €370 million ($414 million).
While the Korean head for the Continent, London has remained a popular destination for Hong Kong investors, with a pair of big-ticket purchases coming within the past fortnight.
Just last week, boutique Hong Kong developer K&K Property Holdings made its London debut by acquiring the 15-storey Orion House in Covent Garden for £155 million, according to React News.
Twelve days ago, Hong Kong-based investment firm Sun Hung Kai & Co teamed up with Australia’s Macquarie Group to buy 17 Columbus Courtyard in Canary Wharf from troubled mainland conglomerate HNA Group for £100 million ($129 million).