This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email [email protected].
The City of London Corporation’s Planning Applications Sub-Committee has approved plans for a 32-storey tower at 85 Gracechurch Street, creating over 290K SF of new office space.
The development will include a ground-floor public hall with food, retail and event spaces, reopening a historic pedestrian route between Gracechurch Street and Lime Street Passage aimed at increasing footfall into the market.
It will feature a fifth floor heritage garden and free public exhibition celebrating the history of the site where once stood the Forum and Basilica — the heart of Roman London — while there will also be provision to display any significant Roman remains in-situ in the basement.
The plans, drawn up by architect Woods Bagot for developer Hertshten Group, will retain and restore the 1930s facade of the existing nine-storey building, with the new structure around three times as high built behind it.
DEALS
Real estate investment fund manager Clarion Partners Europe has acquired two modern, institutional-quality distribution warehouses from Equites Property Fund totalling 438K SF in Peterborough for £52M. The investments represent the first by Clarion Partners Europe in the UK since 2016.
Located on Peterborough Gateway industrial park in the East Midlands, the single-tenant properties, constructed in 2018 and 2019, are both EPC A rated and have achieved a BREEAM “Very Good” certification.
The larger of the two properties totals 302.7K SF and is let on a 10-year term, with 5.4 years remaining, to a wholly owned subsidiary of DSV, a Danish transport and logistics company listed on the Danish Stock Exchange.
The second property totals 135.7K SF and is let on a 10-year term, with 6.3 years remaining, to a subsidiary of Coloplast, a Danish medical device developer and manufacturer listed on the Danish Stock Exchange.
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LondonMetric Property has simultaneously exchanged and completed on the sale of a portfolio of three multi-let industrial estates for £46M. The disposal is slightly above book value as at 30 September 2022.
The estates total 446K SF across 113 units and generate £2.9M per annum of rental income, with a weighted average unexpired lease term to first break of 2.7 years. Two of the estates are located in Birmingham (Coleshill and Stirchley) and the third is located in Dudley (Enterprise).
The properties were previously acquired as part of the deal to take private listed firm Mucklow in June 2019. Since the Mucklow transaction, more than £140M of Mucklow assets have now been sold, reflecting a 24% uplift against allocated cost.
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Regal London has acquired Devonshire Place, a 1.7-acre site at 747-759 Old Kent Road and 765-775 Old Kent Road, opposite the proposed new Bakerloo Line station on Old Kent Road in Southwark.
The proposed new development by Regal London will include a purpose-built student accommodation scheme comprising around 900 beds, plus 220 on-site new affordable homes including new large family homes, commercial and community spaces alongside new public open space and major infrastructure upgrades.
This is Regal London’s second PBSA scheme following The Society on High Road, Wembley in Brent, where permission has been granted for a range of new student homes for 349 residents.
The acquisition of Devonshire Place is the second for Regal London in the first quarter of 2023, following the purchase of the 11-acre Great North Leisure Park in North Finchley, Barnet.
LEASING
The development of a major life sciences cluster at Canary Wharf continues with a range of life sciences-focused startups and scale-up businesses joining the community of technology businesses at its specialist coworking and office hub, Level39, the flexible workspace and tech community.
Launched by Canary Wharf Group 10 years ago, it is now home to over 180 startups and scale-ups and new members include TC BioPharm, the clinical stage biotechnology company; Neural Rays, the ethical AI company; and Sanius Health, a health tech company dedicated to improving rare diseases treatment.
The Cancer Awareness Trust is also using Level39 as a base from which to carry out its work, and has been joined by L Base, a biotech company specialising in innovative R&D of cancer drugs.
The growing life sciences hub at Level39 will soon also be accompanied by the occupiers within the new life sciences innovation centre at 20 Water Street, which is launching in June this year and will provide flexible laboratory space in a joint venture with Kadans.
FUNDS
Nuveen has launched an Article 9 Global Real Estate Carbon Reduction fund, focused on lessening global carbon emissions through investment in listed real estate.
The fund aims to provide long-term capital appreciation and current income by investing in real estate companies that have either achieved carbon neutrality, or have a target to or track record of reducing greenhouse gas emissions in a manner that is aligned with the Paris Agreement.
Jay Rosenberg, head of public real assets, and Ben Kerl, portfolio manager and head of listed real estate investments, will co-manage the strategy, supported by Scott Sedlak and Jagdeep Ghuman, respectively the regional real estate leads in the U.S. and Asia.
The strategy joins Nuveen’s other Article 9 strategies: the Global Core Impact Bond, U.S. Core Impact Bond, Emerging Markets Impact Debt and Global Clean Energy Infrastructure Impact strategies.
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Real estate investment, development and property manager Hines has announced the formation of a new global business unit designed to address the disruptive changes in the built environment, called EXP by Hines.
EXP by Hines consists of two business groups: Global ESG and the Global Venture Lab. Hines has assembled a leadership team tasked with uncovering new opportunities and disrupting the commercial real estate industry.
DEBT
Supermarket Income REIT has refinanced its existing loan facilities with Bayerische Landesbank with a new, three-year £87M term loan.
This secured, interest-only loan replaces the three existing tranches with BLB totalling £86.9M. The new facility matures in March 2026 and is priced at a margin of 1.65% above SONIA, which has been fully hedged for the term of the facility using an interest rate swap to a fixed rate of 4.29%.
The cost of the hedging instrument for the new facility was £2.8M. This was more than fully covered from the £3.3M of proceeds received from the termination of the previous hedging instrument in place for the existing facilities.
FLEXIBLE WORKING
Flexible workspace provider Orega has completed a new management agreement with Thames Estates to create a flexible workspace at Holborn Gate, 330 High Holborn EC1 in the heart of Midtown. The new space will open in early summer 2023.
The 33.5K SF flexible workspace will be newly refurbished to provide around 550 workstations on the first and fifth floors of the building. In addition, there will be substantial collaboration and meeting spaces.
Holborn Gate is a combined office and retail building comprising approximately 175K SF and was recently acquired by Thames Estates in November 2022.
It is the fifth flexible workspace that Orega has launched in London and the fourth in Midtown. The company now offers flex space from 23 locations across the UK.
