250 Bishopsgate, City of London

In early 2005 this asset came onto the market.  It featured a 30 year lease to ABN AMRO with rentals increasing by the UK Retail Price Index. Competition for this particular asset was very strong – we understand that approximately 50 investors actually bid for it. At this time Evans Randall was relatively unknown in the commercial real estate market and at least one other party bid considerably more than we did. However they were unable to complete the transaction in the tight timetable that ABN AMRO and their advisers had set, and when ABN AMRO approached Evans Randall to confirm that we could step in and complete the acquisition in ten days, we were able to do so. Of all our transactions this one was the key to establishing our market credibility.

We acquired the asset at an all in cost of £195 million in July 2005 and swapped the RPI element of the transaction with Bank of Scotland to eliminate that risk. With a 30-year interest rate swap we were also able to lock in our cost of funding for the whole term of the lease. The transaction comprised about £164 million of senior debt and about £32 million of equity.

The asset was later sold at a figure which represented a gross profit to Evans Randall and our co-investors of about £30 million. After all expenses our co-investors achieved a net “cash on cash” return of about 146% (40% IRR).