CDL buys London office for $687m

It has a net lettable area of 329,200 sq ft with 26 floors.

City Developments Limited (CDL) acquired a prime freehold Grade A office tower for $687m (EUR385m) in London, an announcement revealed.

With a net lettable area of 329,200 sq ft, the property with 26 floors and three basement levels is located at London’s main financial district and bounded by Old Broad Street, Throgmorton Street and Threadneedle Walk.

Formerly known as the Stock Exchange Tower, the property housed the headquarters, offices and trading floor for the London Stock Exchange until 2004. The landmark building was originally constructed in the 1970s and had undergone significant refurbishment in 2008.

Its tenants include Cushman & Wakefield’s European HQ, King & Spalding and China International Capital Corporation.

“We have confidence in the long-term fundamentals of London as a global financial hub with a robust office market,” CDL group chief investment officer Frank Khoo said. “The short-term uncertainties surrounding Brexit have presented us opportunities to acquire assets with deep value.”

With average passing rents currently about 25% below prime average rents in the London, the firm believes that there is a strong potential for positive rental reversions. The property also enjoys an overall Weighted Average Unexpired Lease Term (WAULT) of 5 years (to lease breaks) and 5.4 years (to lease expiries).