BENGALURU: Kennedy-Wilson Holdings Inc said on Tuesday it had bought an office building in London for $252 million as it reshuffled its assets, betting on a rebound in workspace demand in the global financial hub, after the pandemic and Brexit hit property valuations in the city.
The U.S.-based real estate investment firm’s purchase of One Embassy Gardens, a 156,000-square-foot building in Nine Elms district, follows its recent sale of a central London office asset, Friars Bridge Court.
Office property valuations in London slumped as the pandemic forced employers to opt for shorter leases and more employees preferred remote working, while Brexit also led to some uncertainty over companies choosing London as their hubs.
Still, many commercial landlords including Land Securities have held on to hopes of a rebound, betting that many white collar workers will eventually return to offices once COVID-19 curbs are fully lifted.
“One Embassy Gardens…is set to further benefit from the ‘tech-clustering’ effect when Apple opens its HQ in 2022,” Kennedy-Wilson said.
One Embassy Gardens is part of the wider Embassy Gardens estate, a new riverside district adjacent to the U.S. Embassy and close to Apple’s new headquarters at Battersea Power Station.
Kennedy-Wilson said the off-market transaction was expected to add $12 million in annual net operating income.