South Korean firm buys Sanctuary Buildings for £285 million in London

London office market

South Korean investment firm Hana Asset Management has acquired The Sanctuary Buildings in Victoria,London from Blackstone Property Partners.

Savills UK, on behalf of Blackstone Property Partners, has completed the sale of the buildings.

The 225,485 sq ft freehold office building, located in Westminster, is let to the Secretary of State and underwritten by the UK Government, for a further 15 years without break at a passing rent of £12.1 million per annum, representing £53.77 per sq ft. The property is fully occupied by the Department of Education, which has been in occupation since 1991. In mid-2018 the UK Government decided to extend the lease by a further 15 years as a result of the property’s strategic central Westminster location and proximity to the Houses of Parliament. The property was comprehensively refurbished in 2009 and the eight floors are arranged around a large central atrium.

Stephen Down, head of the Central London investment team at Savills, comments: “With Savills strong presence in Asia we are able to access first-hand those investors looking for outbound opportunities.  We witnessed approximately £3 billion+ of South Korean investment into London in 2018, and we were able to showcase The Sanctuary Buildings directly to the pool of Korean investors that are known to us.

“Appetite for London amongst Korean parties remains strong in 2019 however we expect most groups will pause for breath in the first quarter of the year following a very busy 2018. The pound’s current strength against the Korean won has also dampened enthusiasm for more lower yielding assets at the moment. However, following recent feedback from our overseas offices in the past few weeks in January there remains strong interest in London from a deep pool of global investors looking to London for sizeable assets that offer long-term and secure income streams in particular.”