Japanese investor Daibiru has acquired Capital House in the City of London from Barings for £169m.
The 121,489 sq ft prime office asset, which is located on King William Street near the Bank of England, is arranged over eight upper floors with ground and lower ground floor retail space let to Pret and Sainsbury’s
Barings acquired Capital House in 2021 and has completed an £11m extensive asset management programme, upgrading the building’s EPC rating to B.
Darren Hutchinson, managing director and head of UK transactions at Barings Real Estate, said: “The extensive repositioning of Capital House, including comprehensive office floor and common part refurbishments and subsequent lettings has resulted in a high quality asset worthy of its excellent location, with a world-renowned set of businesses calling it their working home.
“We’re pleased to have concluded this deal with Daibiru Corporation, ahead of our business plan following its off-market approach, which has served to reinforce our conviction in prime offices in central business districts that benefit from first-class transport links. We are now looking to redeploy the proceeds to create further high-quality assets.”
Gunther Deutsch, managing director, head of European transactions and country head Germany at Barings Real Estate, added: “This sale is a testament to our local teams, be it the asset management team transferring this asset into a class A building, or the transaction team concluding this core transaction in a not yet fully recovered core market.
“This transaction highlights why select office opportunities, in the right locations and with the right amenities, remain among our preferred investments across Europe, whether through developer JVs, refurbishments or change of use transformations that create strongly in demand high-quality office space. Alongside the office sector, logistics and living remain at the top of our list in terms of acquisitions, mainly with core plus to value add risk return profile.”
Stephen Down, chairman of Savills’ Central London investment, which advised Daibiru, said: “This is a landmark deal for a major Japanese institution, and is the second transaction with a Japanese investor for Savills this year, representing our long-term commitment to building strong relationships in Japan.
“There is much speculation on the supposed resurgence of global real estate investment from Japan, but compared to the boom period of the late 1980s I expect this to be a steady flow rather than a torrent, with a wider sector spread of offices, logistics and living. It is a strategic diversification of funds, targeting relatively limited geographies that are recovering from the market corrections over the past two years, and where long-term returns are higher than in the Japanese domestic market.”
RX advised Barings and Savills advised Daibiru, which is a subsidiary of Mitsui OSK Lines. CMS acted as property and corporate legal advisors to Barings and Clifford Chance advised the purchaser.
