Biggest Property Deals Of 2013

It’s December, 2014 is around the corner and that means everyone is slowing down, taking stock, having Christmas parties and looking forward to what next year has in store.

Here at BDG Sparkes Porter, we’ve had a great year and long may it continue. Greg Porter was named by CoStar as Mayfair’s top dealmaker in the three months to December with six deals and Greg, along with Paul Gold and Ross Blanchflower consistently appear in their list of top dealmakers in the Mayfair submarket, but what were the biggest deals of 2013?

At the beginning of the year, tech behemoth Google completed a c. £1bn deal for their new UK headquarters in King’s Cross. The aim is to unite all UK staff under one roof and the (net) 923,000 sq.ft. building will include a running track and a rooftop swimming pool. Planned for Zone A of the 67-acre King’s Cross Central site, plans include approximately 871,000 sq. ft. of office space, 53,500 sq. ft. of retail space and a cycle store with almost 600 spaces.

Another global powerhouse was on the move in Q1. Coca-Cola who made their 80,000 sq ft home in Hammersmith has moved out of west London and into Royal London Asset Management’s 1a Wimpole Street. The lease length is 15 years but the rent is undisclosed however it’s understood that they’re paying approximately £60 per sq ft overall for the 60,604 sq ft property. This is an interesting and significant move and maybe a sign of change in large occupiers’ objectives. The reason cited for the move to an area of London with significantly higher property costs was that Coca-Cola struggled to attract talented young creative staff to work for them whilst they were based in Hammersmith.

Madison Realty and Witkoff Group property Devonshire House in Mayfair hit the headlines in the summer with six lettings totalling c. 32,000 sq.ft. Offshore drilling contractors Noble Corporation signed a £120/sq ft lease on 8,000 sq.ft on the second floor, the highest headline rent paid by a firm in this cycle. Other occupiers include TA Associates who took 9,100 sq ft on the third floor; Canyon Capital took 3,700 sq. ft. on the fourth and Cartesius Advisory Network who took 1,800 sq.ft., also on the fourth floor.

The remaining deals are understood to be Highbridge Capital taking 7,200 sq ft and Beachpoint Capital 1,800 sq ft both on the fourth floor.

In August, a new record was set when Temasek, an investment company from Singapore opened their first office in the UK and are paying a cycle-high rent of more than £125/sq.ft. They are taking 8,100 sq.ft. of Standard Life Investments’ property at 23 King Street, St James’s, SW1.

This month, a German Pension Fund agreed to buy 20 St. James’s Street SW1 from Great Portland Estates for £54.5m with a net initial yield of 2.1%. The 55,490 sq ft property is managed by Pramerica Real Estate Investors. GPE bought the property in 2010 for £42.5m. The price represents a capital value of £982 per sq.ft.; it’s held on a long leasehold interest with, at the time of writing, 98 years unexpired geared to 15% of rents received, subject to a base rent of £223,000 pa.
The central London property market is, despite what the doom-mongers may say, buoyant. Deals are being done, money is changing hands and the world’s biggest players are coming to town.

Have a great Christmas and a happy and healthy New Year and we’ll look forward to a busy and prosperous 2014.