Property Business 31
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LONDON
British Land snaps up property in West End
BRITISH Land bought offices, stores and land next to London’ s Paddington Station for £ 470 million( US $ 707 million), anticipating that more tenants will be drawn to the area by a new high-speed rail line.
The properties at Paddington Central were purchased from Aviva and other investors, British Land said in a statement on July 5. Britain’ s second-largest real estate investment trust will own 1 million square feet of space once the site has been fully developed. It will be the company’ s fourth-largest single asset by value.
Developers including Derwent London and Great Portland Estates are seeking to profit from the construction of the Crossrail highspeed rail line connecting London’ s east and west. Paddington will be one of three Crossrail stations in the West End district when the rail line opens in 2018, said British Land, which is based in the city.
“ Bigger users who want the location just can’ t get space, let alone space at the sort of price that we can offer,” chief executive officer Chris Grigg said.
British Land has permission to build 355,000 square feet of office space on the two Paddington Central development sites. The company may seek planning approval to construct as much as 30,000 square feet of additional space, Finance Director Lucinda Bell said by telephone.
Paddington Central“ is the most significant acquisition we have made since the equity placing in March, and we are confident that investment of those proceeds will now be accretive to 2014 earnings, ahead of our original objective,” Mr Grigg said.
British Land raised £ 493 million in a share sale in March and has since spent more than £ 750 million on acquisitions excluding future property development spending.
The existing office buildings at Paddington Central will give British Land a yield of 6.2 percent when fully leased, Mr Grigg said. That compares with 3.5pc for office buildings in the West End district that includes Mayfair and St James’ s, broker Savills Plc said in May.
– Bloomberg
Property Business 31
HOUSE OF THE WEEK
IN PICTURES
Central London’ s Battersea Power Station, which was decommissioned in 1983 and has stood vacant ever since, has been purchased by a consortium of Malaysian companies with a plan to convert it into hundreds of apartments, offices, shops and a theatre. Photo: AFP
Near the market
A FRESH coat of paint awaits tenants of this sparsely furnished home near Hledan market in Kamaryut township. It is on the fourth floor of a tidy building that has two lifts and round-theclock security. With three bedrooms and 1630 square feet of floor space it can accommodate a family, though it has just one bathroom. The kitchen is roomy but lacks basic appliances. There is enough space adjacent to it, however, for a dining table – but you will have to bring one. The apartment also lacks a fridge and stove and mattresses for the beds. It does, however, have three air-conditioning units.
On the map it looks handy to central Yangon, but traffic congestion makes the airport easier to reach. The balcony at the back offers a view of other people’ s rooftops. Each room is painted a different soft pastel shade but the Korean-style parquet flooring is uniform throughout. The halls are narrow, but the living room is spacious. The vinyl furniture and tiny window in it are, however, disappointing. This unit will require a bit of effort to make it cosy, but its proximity to Hledan market puts everything you need within easy reach. – Ei The The Naing
Location:
Moe Sandar Street, Kamaryut township Rent: K1.5 million( about US $ 1450) a month Contact: Panthakhin Real Estate and General Service( Mya) Phone: 01 229648, 09 43127288, 09 73097581
Photos: Kyawt Thiri Nyunt
ULAANBAATOR
Rents expected to triple in 5 years
COMMERCIAL real estate rents in Ulaanbaatar will more than triple within five years as increases in percapita incomes lure international companies, said Harris Kupperman, who runs a fund that invests in Mongolian properties.
Rental prices for the capital’ s main commercial strip, Peace Avenue, will top US $ 100 per square metre per month by 2018, up from as much as $ 30 currently, said Mr Kupperman, the chief executive officer of Canadian company Mongolia Growth Group, the only non-mining internationally listed company that does business in Mongolia.
Real estate prices in the capital surged as the economy reached double-digit growth driven by a boom in coal and copper mining. That prompted firms such as US food companies KFC, Cinnabon International and Round Table Pizza to open shops this year, joining luxury outlets including LVMH, Moet, Hennessy, Louis Vuitton and Armani.
“ It starts with food and beverage, but eventually you are going to have more retail, too,” said Mr Kupperman, 32, whose company owns retail space in the Peace Avenue business corridor.“ You get 10-year leases signed by high-quality tenants and they add value to the property. They pay their rent on time, so it increases the value, and they tend to pay above market for top locations.”
Mr Kupperman’ s Torontolisted firm has invested $ 40 million in storefront properties, office buildings and redevelopment sites since it set up shop in February 2011, and makes $ 200,000 a month in revenue from these properties, he said.
Retail space on Peace Avenue costs $ 2,500 to $ 3,000 per square metre, Mr Kupperman said, adding that prices could reach levels seen in
Almaty, the biggest city in Kazakhstan, where prices range from $ 10,000 to $ 30,000 per square metre.
Mongolia Growth plans to spend as much as $ 500 million over the next decade on developing highend buildings on the commercial strip, he said.
Mr Kupperman remains“ bearish” on downtown office space. Grade A rents in the area have surged to $ 70 a square metre from around $ 45 a square metre three years ago, said Alex Skinner, the head of Real Source, an Ulan Bator-based property consultancy.
The central business district contains several highrise glass towers that house most of the big international firms doing business in the country. Rio Tinto, the world’ s second-biggest mining company, which is building the $ 6.6 billion Oyu Tolgoi copper and gold mine, has an office there.
– Bloomberg