Lion Plaza in City of London sold for over £200 million

A private Vietnam-based investor has made its first investment in the UK, buying Lion Plaza on Old Broad Street for over £200 million in what is the biggest office transaction of the year in the City of London. Investment volumes in the Square Mile have declined 70% in Q2 this year.

The Grade II-listed 19th Century Lion Plaza building in the heart of the City of London

Lion Plaza, a 26,000 sq m Grade II-listed period office building close to the Bank of England, is the City of London headquarters of American law firm White & Case. It originally came to market at the end of last year at a guide price of £262.7 million and a net initial yield of 4.75%, with Cushman & Wakefield advising on the sale.

The seller is German fund manager Doric Asset Finance, which had bought the asset in 2007. According to sources the sale closed at £209 million and a net initial yield of 6%, a 20% discount to the initial quoting price.

Standard Chartered Private Bank has provided acquisition financing to the Vietnamese investor, who is named as Maurice Duc Hinh Nguyen in Companies House records. It is reported the bank extended a senior loan of around 50% loan to value.

Sarah Cullen, Partner, Norton Rose Fulbright

Global law firm Norton Rose Fulbright has advised Standard Chartered on the financing of Lion Plaza Propco’s acquisition of the multi-let prime office building, which has retail and leisure units on the ground and basement floors.

The transaction is good news for the City, which has seen a distinct lack of activity in recent months.

According to Savills’ City Market Watch there were just £1.25 billion of sales in H1 this year, due to the “unwillingness of owners to launch properties in challenging market conditions”. In the month of June only seven assets were put on the market for a total of £304 million.

“This transaction is highly significant and is the biggest office sale in the City of London so far this year,” said Sarah Cullen, partner, head of real estate finance EMEA, Norton Rose Fulbright. “It demonstrates that, despite the challenging current economic conditions, there remains overseas investor confidence and appetite in prime London office space.”

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