Bloomberg - July 30, 2010
The co-owner of the London tower known as the Gherkin says the time is right to buy more offices in the U.K. capital and is about to make its biggest acquisition since 2007.
Evans Randall Ltd. will pay as much as 250 million pounds ($391 million) in the next few weeks for offices in Drapers Gardens, Michael Evans, the closely held investment bank’s founder and chairman, said in an interview. The building in the City of London, the main financial district, is owned by Morgan Stanley, Canary Wharf Group Plc and Exemplar Properties and leased by BlackRock Inc.
Evans Randall could spend as much as 1.5 billion pounds in a year to buy more central London properties, as it seeks to profit from rising demand for modern space, Evans said. City of London office values have rebounded 19 percent in the past 10 months, following a two-year slump that wiped 45 percent off prices, according to Investment Property Databank Ltd. A shortage of new developments is pushing up rents as companies recruit more staff.
“Now is the time to buy the best quality assets if we can get our hands on them,” said Evans, 57. “The pound is very weak, interest rates are at a record low, rental demand is at an exceptional level -- the best at any time since 2006.”
BlackRock, the world’s biggest asset manager, has a 25-year lease on Drapers Gardens, a 270,000 square-foot (25,100 square- meter) building near the Bank of England. Deka Immobilien, the real estate unit of Frankfurt-based Dekabank Deutsche Girozentrale, pulled out of an agreement to buy the site for about 240 million pounds in June, according to a report last month in Property Week.
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