Lendlease Sells 20% Stake in London’s 21 Moorfields to Japanese Partners

Courtesy of Lendlease

Transaction Overview

Lendlease, an international property and infrastructure company, has finalized the sale of a 20% stake in the prominent 21 Moorfields office building in London. This transaction represents the debut investment in the UK market by a joint venture comprising two established Japanese firms: Sotetsu Urban Creates Company and Yasuda Real Estate Company.

Details of the Office Building

21 Moorfields, which spans 565,000 square feet, was completed in early 2024 and is designated to be the United Kingdom headquarters for Deutsche Bank, locked in under a 25-year lease.

Financial Aspects of the Sale

The building was acquired by Lendlease and its affiliates in 2022 from Landsec for £809 million, indicating a valuation for the joint venture’s 20% stake of over £160 million. Following the sale, Lendlease will maintain a 5% ownership interest in the property and will continue to oversee the management of the building.

Investment Rationale

Hiroyuki Mori, Real Estate Executive Vice President and Representative Director at Yasuda, explained the strategic motivation behind the investment: “The combination of resilient returns, strategic location, and trusted partners makes this an excellent long-term investment aligned with our global strategy.”

Background on the Japanese Firms

Yasuda Real Estate has a long-standing legacy, tracing its roots back to 1912. On the other hand, Sotetsu operates as a subsidiary of a publicly listed holding company’s urban regeneration ventures, emphasizing sustainable development.

Recent Investments by Japanese Firms in the UK

This move is part of a broader trend of Japanese firms ramping up their investments in the UK real estate sector. Just earlier this week, Nomura Real Estate Development announced its partnership with L&G to create 1,000 build-to-rent homes in London, beginning with a 200-unit project in Herne Hill. Additionally, Mitsui Fudosan committed to a £1.1 billion expansion of the British Library in King’s Cross, which will feature 600,000 square feet dedicated to life sciences.

Moreover, last December, Sumitomo Mitsui Banking Corporation made a significant acquisition offer for One Portsoken, a 234,000 square foot office building in London, valued at approximately £150 million.

Conclusion

The sale of the stake in 21 Moorfields illustrates the growing interest of Japanese investments in London’s real estate landscape, highlighting both strategic endeavors and long-term prospects in a vibrant market.