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March 7, 2013

Hines Global REIT Acquires Two Overseas Properties for $215M

By Gail Kalinoski, Contributing Editor

One Westferry Circus, London

Hines Global REIT spent more than $215 million on two office properties in the past week, one in London and the other in Sydney as it continued to expand its international portfolio. Both properties are almost fully leased and located in thriving business districts.

The London building, One Westferry Circus, is a nine-story, 219,889-square-foot property located on the western edge of Canary Wharf along the River Thames. Hines Global REIT acquired the property for $124 million from Teachers REA L.L.C., an affiliate of TIAA-CREF. Jones Lang LaSalle represented the seller.

An 8K statement filed with the U.S. Securities and Exchange Commission noted the property was funded with proceeds from a Hines IPO and revolving line of credit with JPMorgan Chase. It is attached to 7 Westferry Circus and 11 Westferry Circus. They share a retail ground floor but have separate interiors and were built at different times. One Westferry Circus, which was designed by Skidmore, Owings & Merrill, was completed in 1992. It is located near the Canary Wharf underground metro and light rail stations and the Crossway railway station that is under construction. The building is 96 percent leased to Valero Energy Ltd., De Vere Venues, Ltd., and Littlejohn, L.L.P.

“This asset was particularly attractive due to its location in Canary Wharf – one of Central London’s primary business destinations, and home to a wealth of multinational companies,” Hines UK Managing Director Ross Blair said in a company news release. “We believe that One Westferry will become even more desirable with the arrival of the Crossway railway station, which will improve the connectivity of Canary Wharf with the City, West End and Heathrow Airport.”

Hines already owns and manages Stonecutter Court, an office building in London, and Brindleyplace, a mixed-use complex in Birmingham with office, retail and residential space. The company has been active in the United Kingdom since 2001, and has advised on more than two million square feet of projects, completed or in the pipeline. Other UK properties managed by Hines include Cannon Place and 280 High Holborn, both in London.

The Sydney office of Hines announced that the REIT had acquired 465 Victoria, a 15-story, 170,000-square-foot office property in the city’s Chatswood Central Business District, from FKP Property Group. Completed in 1995, the property underwent a $15 million upgrade between 2010 and 2012. The REIT paid $91.2 million and funded the acquisition with cash and a $54.7 million loan from Credit Agricole CIB Australia Limited, according to an 8K filed with the SEC. The property is 97 percent leased to 11 tenants.

The Chatswood office market has shown excellent growth over the past 18 months, with strengthening demand and constrained supply leading to tightening vacancy rates and steady rental growth,” David Warneford, director of Hines’ Sydney office, said in a company release. “This quality asset with strong tenancy will complement our Australian portfolio.”

Hines Global REIT owns at least two other office properties in Australia. In July, the REIT acquired a six-story, 105,637-square-foot building at 100 Brookes St. in Fortitude Valley near Brisbane for $67.6 million from Anthony John Group. It is fully leased to Bechtel for its global mining and metals headquarters. Also last year, the REIT purchased 144 Montague Road in Brisbane, a six-story, 158,682 square-foot- office building that is fully leased to Ausenco Limited, an engineering firm, for $91.6 million.

 

 

 

 

 

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