An Italian pension fund is pushing ahead with the biggest investment deal in the City this year despite market fears over the impact of a potential Brexit.
ENPAM, a pension fund for medical doctors and dentists, has bought a 50% stake in Brookfield Property Partners’ Principal Place, EC2, for close to £400m – a net initial yield of 4.25%.
The Foster & Partners-designed 600,000 sq ft building is due to become Amazon’s City HQ after it completes this year.
The deal marks the first UK acquisition for the pension fund and will be seen by some as evidence of the City’s enduring appeal to investors despite fears over the impact of a potential Brexit.
ENPAM was shortlisted to buy the Gherkin, EC3 in 2014, but lost out to Safra Group, which purchased the building for £726m.
Amazon signed for 431,000 sq ft of office space at Principal Place in 2014 at a rent of around £50 per sq ft, with the option to take all the remaining space in the 16-storey tower.
The agreement kick-started the development of the scheme which has been on hold since January 2012 when law firm CMS Cameron McKenna, which was lined up as the anchor tenant, pulled out of the deal.
Developer Hammerson later sold its interest in the development to Brookfield.
GM Real Estate with Eastdil Secured advised Brookfield; Colliers International represented ENPAM.
All parties declined to comment.
What is ENPAM?
- Ente Nazionale di Previdenza ed Assistenza Medici is Italy’s largest private pension fund.
- The statutory pension insurance scheme represents 360,845 active doctors and dentists and 101,213 retired doctors and dentists.
- Net worth: c. €17.2bn (£13.6bn).
- It has 71.6% of assets invested in securities and 28.4% in real estate.
- ENPAM has a €2bn property portfolio and €2.8bn shares in real estate funds.
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