Ivanhoé, TPG JV Buys Trophy London Office for $400M

Ivanhoé Cambridge, of Montreal, and TPG, a leading global private investment firm, have acquired Woolgate Exchange, a trophy office building in London’s business district, for close to $400 million.

Ivanhoé Cambridge, of Montreal, and TPG, a leading global private investment firm, have acquired Woolgate Exchange, a trophy office building in London’s business district, for $397.6 million (CAD 400 million), Ivanhoé Cambridge announced Monday.

The nine-story, 351,000-square-foot building, completed in 2000, is sited at 25 Basinghall Street in the heart of the City of London, close to the Bank of England. TPG originated the transaction, in which Ivanhoé Cambridge co-invested, and the building will be co-managed by the joint venture. Woolgate Exchange is fully leased to Portigon AG (the former WestLB AG, or West German State Bank), whose sub-tenants include Investec Asset Management, Sidley Austin and the University of Chicago.

The acquisition was carried out by way of a complex financial structure that took about eight to 10 months to pull together, Ivanhoé Cambridge spokesperson told Commercial Property Executive.

Woolgate Exchange had been purchased from Bankhaus Woelbern, of Hamburg, by D2 Private in early 2006 for a reported £325 million. That purchase was financed through Anglo Irish Bank, which in January 2009 was taken into state ownership by the Irish government. In July 2011, Anglo Irish was merged with another state-owned banking institution, the Irish Nationwide Building Society, to form Irish Bank Resolution Corp.

Then, in 2012 TPG agreed to acquire the junior loan from IBRC. By working with both the senior and junior creditors, the Ivanhoé Cambridge/TPG partnership was able to acquire the building in a proprietary transaction. The purchase reportedly will partially repay the junior loan secured against the building and fully repay the senior bondholders.

The transaction is a change of pace for Ivanhoé Cambridge, which has spent serious money buying elite multi-family properties in London over the past 12 months.

In early February 2012, it paid more than CAD 150 million for four multi-family buildings totaling 207 units in the upscale neighborhoods of South Kensington, Hyde Park, Bayswater and Marylebone.

Importantly, Ivanhoé Cambridge, through a real estate subsidiary, at that time also entered into a partnership with Residential Land, of London, and Apollo Global Real Estate Management. The relationship gives Ivanhoé Cambridge, the majority owner, an opportunity to invest in the acquisition of other residential buildings exclusively with Residential Land and Apollo Global Real Estate Management.

That potential was realized in early December, when Ivanhoé Cambridge acquired majority ownership interests in two more London multi-family complexes, Peony Court, a three-building, 19-unit complex in South Kensington, and Chantrey House, a 28-unit building (with additional retail spaces) in Belgravia. The transaction was valued at CAD 100 million.

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