JP Morgan HQ in London Offered for Sale

The Telegraph - December 6, 2010

The company has appointed GM Real Estate to advise on the sale of Alban Gate, one of the City's most recognisable office buildings.

The 382,000 sq ft asset was only acquired by Carlyle in July as part of a £671m deal for the White Tower portfolio, a collection of London offices previously owned by bankrupt tycoon Simon Halabi.

The sale is seen as an opportunity to raise capital to invest in other White Tower offices, where there are significant redevelopment opportunities.

Alban Gate is the biggest asset in the portfolio and its long-term income stream is likely to be attractive to investors. Its annual rent is £18.2m and JP Morgan's lease runs until 2025.

Carlyle is understood to believe it can raise more than £300m from a sale. A £300m price would represent a yield of 6pc. The private equity group acquired the White Tower portfolio at a 9pc yield.

Alban Gate was snapped up by Carlyle after Mr Halabi, once regarded as one of the UK's wealthiest entrepreneurs, lost control of his empire.

His collection of nine London office buildings tumbled in value from £1.8bn in 2006 to £929m last June. The offices were backed by £1.15bn of bonds issued by the White Tower 2006-3 vehicle, and the decline in value caused a breach of loan-to-value covenants.

This prompted bondholders to call in the debt, with property agents CBRE and Knight Frank overseeing a disposal of the assets in order to raise funds to repay bondholders.

Carlyle acquired six of the properties, including Alban Gate and offices housing UBS and IBM. Aviva Tower, home of the insurer in London, is still in the hands of the loan servicer, but it is understood to be preparing a sale for the first half of next year.

Carlyle declined to comment. Sphere: Related Content