CBRE's $2B Equity REIT Stakes Second UK Claim

[IMGCAP(1)]LONDON-CB Richard Ellis Realty Trust, armed with a $2-billion equity fund, has banked its second UK deed, getting a four-acre stake in the nation’s leading technology corridor. The REIT’s goal is to pump 30% of the till into overseas markets.

The REIT paid £13,795,000 or $27.86 million for the 40,468-sf Thames Valley Five, a class A office building at 400 Thames Valley Park Dr. in the M4 corridor, west of Central London. The REIT’s new building is leased for the long term to Regus [UK] Ltd., a subsidiary of Regus Group plc. According to an SEC filing, the seller is Stockholm-based Schroder Exempt Property Unit Trust.

Jack Cuneo, CEO and trustee of CBRE Realty Trust, tells GlobeSt.com that the plan is “to follow the markets that CBRE Investors are in” as the roadmap for the REIT’s acquisitions. All commercial product types are fair game, he says.

[IMGCAP(2)]“We find pricing attractive in the UK right now,” Cuneo says, “at better prices now than what we might have found a year or two ago.” CBRE Investors UK’s 90-broker team is scouting Mainland Europe and partnered with the REIT on the purchase talks for Thames Valley Five.

The just-bought building sits on a 4-acre tract in the 1.2-million-sf Thames Valley Park, home to a Microsoft Corp. campus owned by London-based Mapeley Ltd. “This building is located in a significant office park in one of the most important high-tech office markets in the UK,” Phil Kianka, operations director for the Princeton, NJ-based REIT, said in a press release.

CBRE’s publicly-traded status blocks talk about the future. Cuneo did say that the REIT is a low-leverage player, keeping debt to 40% to 50%, which means the equity pool could fund at least $4 billion of assets in the US and overseas markets.

Using a roadmap set by CBRE Investors’ offices, the REIT has scouts out in Paris, Brussels, Luxembourg, Frankfurt, Milan, Hong Kong, Shanghai, Tokyo, Sydney, Beijing and Singapore, in addition to London. “Where we have boots in the ground and people in place, it’s much easier to piggyback off our existing opportunities,” Cuneo says. “One of the things we’re looking for is good solid acquisitions for our US investors. Cash and the ability to move very quickly work for us.”

The Thames Valley Five purchase came nearly one year after the REIT’s $22.2-million acquisition of a 50,000-sf office building at 602 Central Blvd. in Coventry, England. Its seller was Hartford, CT-based Henderson Global Investors Inc.