Goldman Sachs’ merchant banking division has completed the purchase of a £350m UK property portfolio seen as a bellwether for the state of the market after the Brexit vote.
Goldman fought off competitors to secure the portfolio of 26 office, retail and industrial buildings from the Swedish pension fund Alecta, reports Judith Evans in London.
The purchase price amounts to a net initial yield of 6.1 per cent, and represents an 8 per cent discount from the £380m originally sought by Alecta but also shows pricing holding up relatively well post-referendum, said an agent familiar with the deal.
“It doesn’t look cheap,” the agent said.
Goldman’s Real Estate Investment Group, advised by Gerald Eve, had originally sought to buy the properties as part of a larger portfolio including US assets but the US portion was bought by the world’s largest real estate investors, Blackstone.
UK real estate capital values fell by 3.3 per cent in July but the decline slowed to an 0.5 per cent drop in August and a 0.2 per cent fall in September, according to the property advisers CBRE, allaying fears of a major downturn in the aftermath of the vote.
Alecta, which is moving out of direct international real estate investments, was advised by JLL.