Henderson Eyes London Office Opportunities with $330M Fund

With industry players speculating that Central London’s office market will soon hit bottom, the timing appears to be just right to snap up assets in the revered locale, and London-based Henderson Global Investors is positioning itself to do just that, while taking others from around the globe along for the ride. The independent asset manager has just launched the Henderson Central London Office Fund II, with plans of raising an initial $330 million to invest in assets as the numbers on price tags decrease.”It certainly feels as if we are at or close to the bottom in terms of value,” John Slade, head of direct investment with international property advisor DTZ, said during an interview with CPN for a May 20th article on Europe’s commercial real estate market. CLOF II is an absolute return, close-ended fund with a 7-year life and a goal of ultimately raising as much as $820 million. “We believe that there will be a finite opportunity to invest in assets of this quality, in this world class location, at historically attractive prices, while capital markets are restricted,” Mike Sales, director of property investment at Henderson, said in a prepared statement. “We’re already beginning to see interesting assets at attractive prices, and aim to be in a position to invest ahead of the general market re-pricing expected from 2010 into 2011,” added fund co-manager Clive Castle. The fund will target well-located quality office buildings throughout Central London. Multi-tenanted properties with little short-term occupier risk will be of high priority. Managers of CLOF II intend to begin returning capital to investors in the fourth or fifth year. Henderson is marketing the fund to institutional investors in the United Kingdom and abroad. “The devaluation of sterling coupled with the magnitude in outward yield shift has made London property compelling for overseas purchasers,” real estate services firm Jones Lang LaSalle noted in a recent report. “Current yield levels continue to attract the interest of German funds in both the City and West End and new entrants from a variety of countries.” First quarter numbers validate the trend; foreign investment accounted for approximately $520 million of the $1.4 billion in transactions. Castle will venture to the States in mid-June to promote CLOF II.