The Telegraph - December 16, 2010
The biggest office deal in the City this year has been completed after two JP Morgan funds agreed to buy Bishops Square for £557m.
The 825,000 sq ft property is the headquarters of law firm Allen & Overy and is located next to Spitalfields Market.
The deal highlights the scale of investor demand for property in the Square Mile, which has led to the capital values of commercial property recovering sharply since last summer.
Bishops Square is being sold by Hammerson, the FTSE 100 property company, and the Oman Investment Fund (OIF), who operated a 25:75 joint venture. Oman only acquired its stake last June in a deal that valued the property at £445m. Wednesday's sale represents a 25pc increase on that price and a gain on the £510m book value of the asset at June 30. The price reflects a yield of 6.2pc.
Peter Reilly, head of JP Morgan Asset Management's European real estate group, said: "We remain bullish on investing in high-quality, well-tenanted office properties located throughout Europe's most important cities and this acquisition represents a further expansion of our funds' core property portfolio in Europe."
Hammerson completed the office development in 2005 as part of the regeneration of the Spitalfields area.
David Atkins, chief executive, said: "We are capitalising on the market recovery over the past 15 months and Hammerson has released funds for investment into other office and retail developments and acquisitions."
OIF, traditionally a long-term holder of assets, said it sold the property because it is prepared to "adapt to market dynamics in an efficient manner to bring value to our shareholders".
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