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| London Stock Exchange (1972-2004) Tower Photo taken by BB98uk in the early 90's from the back of the Bank Of England. Photo credit: Wikipedia |
Bank of Ireland Private Banking today announced that it has entered into a partnership with Hammerson and GE Capital Real Estate for the redevelopment of the Old London Stock Exchange building on behalf of private clients. The Bank paid €55.8m (£37.5m) for its 25% stake in the development.
The redevelopment of the 26-storey tower building will provide c.325,000 square feet of Grade A office accommodation and c.7,000 square feet retail space. Construction began in February 2006 with completion scheduled for December 2007. The building was the former home of the London Stock Exchange and is located at Old Broad Street, adjacent to the Bank of England in the City of London.
Private Banking’s partners on this deal are Hammerson plc, a leading European property company and listed as a FTSE 100 company, who holds a 50% share in the redevelopment, and GE Capital Real Estate (part of GE Commercial Finance) who hold 25%. Private Banking was advised by Jones Day and Atisreal in relation to this transaction.
Commenting on the attractiveness of the deal, Peter Collins, Director of Property, Bank of Ireland Private Banking, said: “We have been looking at the City of London for quite a while and we believe that now is the right time in the rental cycle to get involved in a speculative office development. This is a landmark site in the City in terms of location and will be a Grade A office development in an area where there is currently a severe lack of similar quality office space. This shortage of Grade A office buildings in the City combined with an improvement in the occupational market means that this redevelopment is likely to be delivered into a very strong rental market in December 2007.”
“We are delighted to be investing in this partnership with a developer of Hammerson’s reputation and a global real estate investor such as GE Real Estate. In terms of our strategy, we are actively seeking and expect to do other similar type of transactions with developers over the coming months, added Peter Collins’
This property acquisition comes on the back of two recent sales which generated significant returns for Private Banking clients. In October the sale of 5 St. Philips Place, Birmingham was completed, generating 115% return on equity over two and a half years for a consortium of clients. In August Private Banking sold Gallions Reach Shopping Park in London for €284m (£192m), providing a 40% return on investment in 21 months.
Bank of Ireland Private Banking manages c.€4 billion in assets, including €1.5b in property, on behalf of its clients. In addition to the UK market, Private Banking manages property assets in the UK, Belgium, France, Holland, Sweden and South Korea.
