BLP partner secures landmark Canary Wharf tower purchase

Berwin Leighton Paisner (BLP) partner Chris De Pury has acted for a private equity fund on the purchase of a landmark Canary Wharf building from his former client Hammerson.

De Pury advised the $1.3bn (£870m) vehicle MGPA Europe Fund III, a subsidiary of the $5.2bn (£3.5bn) MGPA Global Fund III, on its purchase of Exchange Tower in London’s Canary Wharf for £135m.

The deal reflects a yield of 8.1 per cent off a contracted rent of £11.1m and the weighted average lease expiry is four years. The 500,000sq ft office building, which is let to 30 ­tenants, is 49 per cent secured by the UK Government and Barclays.

De Pury was assisted by associates Miranda Morad (corporate), Celia Berg (real estate) and Amy Manchia (tax), and worked opposite Herbert Smith.

Although Herbert Smith partner Don Rowlands is the Hammerson relationship partner, Simon Price led on this deal alongside associate Katy Craik-White.

The deal comes a decade after De Pury, then a partner at Herbert Smith, advised Hammerson on its original acquisition of the building in 1999 for £77m. De Pury left Herbert Smith for BLP in 2007.

MGPA is increasingly active in the European market, having already made investments in France, Italy, Greece and Poland. In December 2009 it made its first UK acquisition with the purchase of landbank ­company Lands Improvement Holdings.

MGPA’s head of UK acquisitions Hamish MacDonald said: “The UK’s a key market for the fund. We’re positive about rental growth prospects for the central London office ­market due to the lack of supply available from the previous cycle and the ­constrained immediate development pipeline.

“In Exchange Tower the fund has acquired a good-quality, multi-let office building at a capital value below reinstatement cost and in a highly supply-­constrained submarket.”

This comes as Herbert Smith partner Simon Price acted alongside Dewey & LeBoeuf and SJ Berwin on the sale of Milton Gate – Addleshaw Goddard’s headquarters – to a Middle East investor as part of a highly secretive deal (The Lawyer, 28 June 2010).