Reading: Microsoft campus to be sold to South Korean investors

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TBM Team

The Valesco Group, the London headquartered European real estate investment manager, together with AIP Asset Management, the Seoul headquartered asset manager, have exchanged contracts to buy Microsoft’s UK HQ campus in Reading - formerly owned by Mapeley - for a gross purchase price of £100 million.

The sale of the Microsoft Campus has been a long time coming, according to reports.

Mapeley’s Microsoft Campus acquisition was part of a 16-strong regional UK office portfolio, dubbed the ‘Beta’ portfolio and assembled for £277.9m in late 2005, financed by Deutsche Bank. Completion of the sale is forecast to occur in the next four to six weeks.

The freehold campus is let in its entirety to Microsoft, the global technology company’s UK subsidiary, at an average rent of £27 per sq ft. NASDAQ-listed Microsoft Corporation is the world’s largest software company with a S&P AAA credit rating.

Comprising 246,138 sq ft of grade A office space across three buildings, the property is strategically located in Thames Valley Park which is less than three miles from Reading town centre, the closest of Reading’s three major business parks. Reading is at the centre of the Thames Valley region and has developed into a European hub for multinational corporates and acts as the UK’s “Silicon Valley” cluster for technology firms including Oracle, Huawei, Nvidia, Symantec and Verizon.

Reading’s real-estate fundamentals are primed to significantly strengthen due to the launch of the Elizabeth Line (Crossrail) and the associated transformational £900m infrastructure investment in Reading station, cementing its direct access to Central London and its position as a major gateway for the UK.

The acquisition builds on Valesco’s and AIP’s substantial deployment of capital in the UK market in 2018 which commenced with the £248m acquisition of Cannon Bridge House in the City of London, also backed by South Korean investors.

Shiraz Jiwa, CEO of The Valesco Group, said: “This acquisition demonstrates our ability to unlock a complex holding structure by acting quickly and having the capital available to deploy. By doing this, we have secured a prime, sought after asset in a strategically important location, which is generating high-quality income backed by an exceptional covenant. We are very pleased to be adding Microsoft to our portfolio of blue-chip tenants. The real estate fundamentals underpinning Reading are increasingly compelling and its entrepreneurial talent pool is very attractive to multinational occupiers.

“This transaction continues our commitment to the UK market where, in addition to mainland Europe, we see strong potential to further deploy capital to deliver value for our investors.”

Source: CoStar

TBM Team