A fund managed by BlackRock is close to selling a Docklands tower for £191m, reflecting a 42% premium on what it paid for the building in 2010.
Gaw Capital Partners has exchanged contracts to buy Exchange Tower at Harbour Exchange Square, E14, (pictured) on behalf of an Asian consortium, at a price reflecting a circa 6.5% yield.
The £800m MGPA Europe Fund III, which is now managed by BlackRock following its 2013 takeover of the fund’s manager, bought Harbour Exchange from Hammerson for £134.6m, reflecting an 8.1% yield.
At the time the 482,950 sq ft office tower at 1&2 Harbour Exchange had a rent roll of £10.7m and a weighted average unexpired lease term of four years.
MGPA carried out a refurbishment of the building and secured a 165,000 sq ft letting to the Financial Ombudsman Service.
The financial watchdog agreed a 15-year lease from 2014.
Harbour Exchange occupies a nine-acre freehold site to the south of the Canary Wharf estate and adjacent to the South Quay DLR station.
Hong Kong-based Gaw has led close to £1bn of London deals since making its debut at Vintners Place, EC4, in September 2012.
It has invested alongside several Korean and Chinese investors in London including the Korea Federation of Community Credit Cooperatives, the Korean Teachers’ Credit Union, Hyundai Fire and Life Insurance and Ping An.
The latest deal reflects how yields have tightened over the two years since the firm made its debut.
Gaw and its investors will typically only target property with a yield of 5.5%-6.5%.
While it began investing in the City core, it has been forced to cast its net wider as the market has heated, making its debut in Paddington last year before entering the Docklands market with this latest acquisition.
Prime yields in London have tightened from 5.25% in the third quarter of 2012 to 4.5% today, according to Savills.
jack.sidders@estatesgazette.com
