South Korean pension giant the National Pension Service of Korea is leading the race to buy Goldman Sachs’ new £1.3bn London headquarters.
Fronted by LaSalle Investment Management, is it among four bidders that submitted offers to buy the 843,922 sq ft building at 40 Shoe Lane, EC1.
It is competing against fellow South Korean pension fund Hanwha; Potegadea, the investment company of retail mogul and Europe’s richest man, Amancio Ortega; and CK Asset Holdings, backed by the family trust of Hong Kong’s most famous businessman, Li Ka-shing.
Each rival bid has a variety of conditions that are being considered by the seller including negotiations over the lease that Goldman will put in place on the building. It is expected it will sign for 25 years with a 20-year break option at a rent of around £65 per sq ft.
The prospective purchase by the $430bn pension fund would be its first in the UK for five years, having of late been a more active seller in the country, most notably disposing of the HSBC Tower at Canary Wharf, E14 for £1.2bn in 2014 to QIA.
London has seen a surge in South Korean investment this year, including Ho Bee Land’s £650m purchase of Ropemaker Place, EC2; Mirae Asset Daewoo’s £340m purchase of 20 Old Bailey, EC4, and Samsung Investment Management’s £315m purchase of 200 Aldersgate, EC1.
Investment from Seoul has stepped up due to a combination of factors including increased interest rates in the US, tightening yields in mainland Europe, and the availability of cheap debt.
Goldman is consolidating its London occupation and moving out of a number of buildings, (see box) and is due to take occupation in summer next year. Its outgoing chief executive Lloyd Blankfein is famously bearish over the UK leaving the European Union, and has expanded its occupations in Frankfurt as a result, and suggested it will consider subletting space at Shoe Lane if necessary.
Eastdil Secured and CBRE are acting for Goldman Sachs.
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