One of the busiest American investors in the UK is in talks to buy 3 St James’s Square, SW1, a multilet core-plus office, from Hong Kong private equity investor Joint Treasure International for around £125 million, CoStar News understands.
Michael Elliott is advising Joint Treasure while JLL is understood to be advising listed US real estate investor Realty Income.
WELPUT, the specialist Central London real estate fund, sold the building to a consortium of investors in Joint Treasure International for £135 million in 2017, reflecting a net initial yield of 3.96% and a capital value of £2,609 per square foot.
The building was bought by WELPUT in 2012 and comprehensively refurbished in 2015 to provide 51,747 square feet of Grade A office space.
3 St James’s Square comprises nine floors and a basement level. The property is leased to media company Condé Nast as well as various investment firms, with the basement and ground floors vacant. The average passing rent is £101.95 per square foot.
Realty Income has been a major investor in UK real estate in recent years but has focused on retail, particularly retail parks and supermarkets.
In its results for the three months to end of September published yesterday it said it had spent $326.5 million on 15 properties.
In the UK it most recently bought Arnison Shopping Park in Durham in the North East from CBRE Investment Management for £105.94 million.
Realty, led by former investment banker Sumit Roy, has been the most active buyer of long-lease supermarkets and retail parks in the UK since entering the market in 2019 when it bought 12 Sainsbury’s supermarkets, jointly owned by British Land, for £429 million. It has spent more than £2 billion buying supermarkets, DIY stores and more than 30 retail parks. The Durham acquisition is its largest UK retail park investment in 2024.
Realty is tipped as the buyer of 3 St James's Square in Savills' latest West End investment watch, in a transaction it says underlines further evidence of "demand for large-scale assets across the risks spectrum".
Savills says the most significant activity has been the bids process of 20 Manchester Square, W1, a 79,000-square-foot office prelet to Lazard for 15 years. Invesco’s long leasehold interest has received strong bidding and is now under offer at a level understood to be around £120 million, better than 5.2%. Savills points out that if it completes the sale will be the first office income deal with over 10 years unexpired above £100 million, since the sale of 50 Broadway, SW1, in December 2022. Savills does not mention the buyer but it is reportedly Delancey.
Savills said it is tracking 85 openly marketed assets at a combined quoting price of £2.17 billion.
Realty, JLL and Michael Elliott did not comment.