German fund manager Deka is under offer to buy Hammerson and Pearl Assurance’s Moorhouse office scheme in the City.

The open-ended fund manager is believed to have agreed terms last week to buy the 305,000 sq ft Foster & Partners-designed building at an initial yield of around 6.4% which is around £230m.

Hammerson holds a 67 % stake while the rest is held by Pearl Assurance.

Joint venture development
Moorhouse was developed in a joint venture partnership between Hammerson, Greycoat Estates, and Henderson Global Investors, on behalf of Pearl Assurance.

The building which was completed in 2004 has seven principal tenants including Australian bank Macquarie and has nil vacancy. In its 2007 results Hammerson said Moorhouse has a weighted average unexpired lease term of around 9 years.


Hammerson and Pearl Assurance instructed Strutt & Parker to sell the building in June this year. It was brought to the market with a price tag of around £300m in June this year.

It is thought Moorhouse had been under offer to another German fund but the deal fell out of bed.

City disposals

Hammerson has been selling a number of City assets this year. In February this year Hammerson and its 50:50 joint venture partner Japanese company Kajima sold One London Wall German insurance company Hansainvest for £136m. The last book valuation of the building was £160m.

Deka has also been active in the City recently and in May this year bought Standard Life Investment’s One Old Jewry scheme on Poultry at a yield of between 5.5% and 5.75%. The 62,500 sq ft building was marketed at £85m – a 5.4% yield. Tenant financial software company Fidessa pays £65/sq ft.

Increasing German interest
If Deka completes the deal at Moorhouse it will be further evidence of the increasing interest from German buyers in devalued central London property.

Last week German fund manager Signa Deutschland went under offer to buy UBS Global Asset Management’s 200,000 sq ft Milton Gate building on Moor Lane at about £150m reflecting a yield of 6.25%.

The building, which UBS ‘s Triton Property Fund bought for £50m in 2005, was marketed at £172m – a 5.5% yield – in May but the market has since changed dramatically.

Savills advises Deka. Jones Lang LaSalle advised Signa. DTZ and CB Richard Ellis advised UBS. All parties declined to comment.


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