City of London's Bishop Square sold for £557m

City of London's Bishop Square sold for £557m


Property giant, Hammerson plc, has announced the sale of Bishop Square offices in London, the 25:75 joint venture with the state of Oman, to JP Morgan Asset Management for £557 million.

The building, developed by Hammerson and completed in 2005, provided 850,356 sq ft of office space let to Allen and Overy and 49,514 sq ft of retail space.

Commenting on the sale, David Atkins, chief executive of Hammerson, said: “This disposal fits with our strategy of creating value through portfolio management. We retained a stake in Bishops Square after the sale to Oman Investment Fund and have worked well together on the joint venture.

“We are capitalising on the market recovery over the last 15 months and Hammerson has released funds for investment into other office and retail developments and acquisitions.”

The JV company has been purchased by two funds managed by J.P. Morgan Asset Management.

Peter Reilly, Head of J.P. Morgan Asset Management’s European Real Estate Group, said: “We remain bullish on investing in high-quality; well-tenanted office properties located throughout Europe’s most important cities and this acquisition represents a further expansion of our funds’ core property portfolio in Europe.

“Hammerson’s development of Bishops Square is an excellent, modern headquarters with a long-lease to a single blue-chip tenant so fits our criteria perfectly.”

Hammerson’s net proceeds from the sale of its 25% interest are £79 million,  which include the receipt of performance payments due to Oman Investment Fund, an Omani Government Investment arm (OIF), as well as the joint venture’s debt and interest rate swap. This represents a surplus of £34 million over the June 30 book value.

Hassan Al Nabhani, Chief Executive Officer of OIF, said: “Whilst OIF remains focused on medium to long term investments in real estate and private equity in association with quality partners, we adapt to market dynamics in an efficient manner to bring value to our shareholders. The acquisition and disposal of Bishops Square reflect this investment approach. We have worked well with Hammerson on this successful joint venture and hope to have the opportunity to work together on future projects.”

By Shelley DeBere


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