With the backing of a South Korean consortium of institutional investors, The Valesco Group (Valesco) and AIP Asset Management (AIP) have acquired Microsoft’s UK headquarters in Reading for £100m.
The partners exchanged contracts to purchase the three-building campus from Solutus and FI Real Estate Management. The price of the deal represents an initial yield of 6.6%.
Microsoft’s UK headquarters are situated in Thames Valley Park and consist of 246,318 square feet of office space across three buildings. The campus is let to Microsoft Limited, Microsoft’s UK subsidiary, at £27/sq ft.
This is not the first time Valesco, a London-based European real estate investment manager, has partnered with AIP, a South Korean asset manager based in Seoul. Earlier this year, together the two acquired Cannon Bridge House in the City of London for £248m from Blackstone, again backed by South Korean investors.
This acquisition follows the news that South Korea is expected to be the largest foreign investor in the City of London commercial property market by the end of 2018, following acquisitions such as Korea’s National Pension Service buying and leasing back Goldman Sachs’ £1.16b headquarters.
Chief executive of Valesco, Shiraz Jiwa, said: “This acquisition demonstrates our ability to unlock a complex holding structure by acting quickly and having the capital available to deploy. By doing this, we have secured a prime, sought after asset in a strategically important location, which is generating high quality income backed by an exceptional covenant. We are very pleased to be adding Microsoft to our portfolio of blue-chip tenants.”
Investment in West London and the Thames Valley is forecast to hit £2 billion in 2018. The introduction of Crossrail in 2019 will likely bring further investment and growth to the area – an area which is already considered Britain’s tech hub – as a result of its improved access to Central London.