Partners double their money on City Block

Foreign appetite for London office stock has helped Palmer Capital and Walbrook Land to double their money on a City asset they bought in 2011.

In an off-market deal this week, the Palmer Capital Development Fund II and Walbrook Land sold 103 Cannon Street, EC4, to a private Spanish investor for £17.2m – a 4.6% yield.

The deal comes three years after the pair bought the block from Minerva for £5.9m. They redeveloped it as a grade-A 17,095 sq ft scheme which completed in May last year.

Chris Button, director and fund manager at Palmer Capital, said: “We could see the opportunity to acquire an old and out-of-date office building, bring it up to a City-quality standard and then cash in as the market recovered and hit a high. The business plan has worked incredibly well, more or less doubling our money on exit.”

The purchase is the latest in a wave of foreign investment into the City. According to the Investment Property Forum, overseas investors owned 58% of offices in the City of London at the end of 2013.

GM Real Estate acted for Palmer Capital and Walbrook; JLL advised the buyer.

Author: Simon Creasey, Property Week