Dubai’s Easa Saleh Al Gurg Group is in exclusive talks to buy 2&3 Bankside, SE1, from M&G Real Estate for around £400m.
The deal would be the Middle Eastern group’s fourth and largest acquisition since entering the UK market in 2013, when it bought the IBM Building, SE1, from Lord Sugar’s Amsprop for £120m.
Al Gurg also bought 5 Cheapside, EC2, for £80m from Amsprop in 2015. Most recently, it acquired the Peak in Victoria, SW1, for £145m from TH Real Estate through its investment arm Wolfe Asset Management.
The price understood to be agreed for 2&3 Bankside represents a yield of circa 4.75%. The office space is let to Omnicom on two separate leases, both expiring in September 2027. It was initially prelet to Royal Bank of Scotland on two 20-year leases at £40.50 per sq ft with five-yearly upwards-only rent reviews. The bank later sublet the office space to Omnicom for about £45 per sq ft in 2014.
Cushman & Wakefield was instructed by M&G Real Estate to sell the campus in January for circa £400m.
The deal reflects the depth of Middle Eastern appetite for the London office market and the ever advancing status of South Bank.
SE1 investment volumes
Source: Savills. NB 2017 data accurate to end of Q1
Middle Eastern investors accounted for 7% of investment in central London commercial property in Q1, according to Knight Frank research published this week. Total investment was almost £4.7bn, the highest level since the end of 2015.
Recent prominent deals in SE1 have included Singapore-based Temasek and Canadian investor Oxford Properties’ acquisition of the Blue Fin Building from a subsidiary of Time Inc for £415m in late 2015. In March this year, EG revealed Slovakian developer HB Reavis has placed the 1.4m sq ft development opportunity Elizabeth House under offer for more than £250m.
JLL is representing Al Gurg Group.
All parties declined to comment.
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What is Al Gurg Group?
Founded in 1960 by Easa Saleh Al Gurg, the family-run group has grown into a multidivisional conglomerate with 27 companies. The Dubai-based group holds considerable real estate in UAE, including office, retail, industrial and residential properties.
In addition to being chairman of the business, Easa Saleh Al Gurg was ambassador to the UK & the Republic of Ireland from 1991 until 2009.
His grandson Abdulla Al Gurg is general manager of its real estate investment arm Wolfe Asset Management. In a statement about the group’s purchase of The Peak in Victoria, SW1, in November, he said: “We are extremely proud to have purchased such an iconic building which perfectly fits our strategy of owning best-in-class office buildings in prominent central London locations.”
The group has previously expressed its intention to invest in UK commercial real estate, telling Middle Eastern financial publication Zawya last year that it was planning to look to the UK to diversify away from the slow-growing Gulf markets.
He said: “We think that Brexit was of value to us, because the pound has gone down by 20-25% and it has actually opened up opportunities. “A lot of investment from Middle Eastern families has gone into the UK in the past and this is still continuing,” he said, adding that Britain was seen as “a safe haven” for Arab investors.
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