Gatehouse Bank advises Lembaga Tabung Haji on 3rd real estate landmark investment

Lembaga Tabung Haji, the Malaysian Hajj pilgrims fund board, in partnership with Gatehouse Bank plc, a Shariah compliant investment bank based in the City of London, has completed the £75,750,000 million acquisition of Unilever’s UK and Ireland headquarters office in the UK. By undertaking a corporate purchase the transaction provides the Malaysian sovereign fund a net initial yield of 6.18%. Gatehouse acted as Investment and Shariah Adviser for the deal, which marks Tabung Haji’s third investment into the UK real estate market and is a key part of its wider global investment strategy. Lembaga Tabung Haji’s first UK asset acquisition was 10 Queens Street Place in November, 2012 also advised by Gatehouse Bank.

Let entirely to Unilever, Unilever House is a modern freehold building in Leatherhead, Surrey, close to the M25 and equidistant between Heathrow and Gatwick airports comprising 176,654 sq ft of high quality office accommodation arranged over ground and two upper floors. Unilever, an institutionally sought after covenant rated A1 by Moody’s and A+ by Standard & Poors, has also invested in the building’s upkeep having recently funded a car parking extension for its employees by extending their lease and increasing the rent passing per annum. This investment highlights the tenant’s continued commitment for their occupation of Unilever House.

The UK continues to remain a preferred real estate investment haven among Malaysian sovereign investors. Given its status as one of the most mature and established property markets globally, the UK offers investors the opportunity to earn secure income over leases that typically exceed 10 years. To-date, Malaysian pension and retirement funds have invested more than £4.0 billion in the UK real estate market.

The lack of new office development in the South East office market in the UK over the last 5 to 10 years has created an attractive supply and demand dynamic providing the prospect of strong rental growth, particularly for modern office buildings such as Unilever House. In addition, an increasing weight of money is targeting the South East market in order to achieve initial yields in the region of 6.00% on securely let property.

Will Lowndes, Vice President, Real Estate at Gatehouse Bank, commented:

"We are delighted to have advised Lembaga Tabung Haji on their acquisition of Unilever House which provides an attractive leveraged distribution secured against a long lease backed by the world renowned Unilever credit. Lembaga Tabung Haji’s undoubted track record in the UK and an ability to move quickly helped them win the deal.”

Richard G Thomas, OBE, Chief Representative in Gatehouse Bank Kuala Lumpur Representative Office and Senior Advisor to the Board of Gatehouse Bank said:

“Gatehouse Bank, is a specialist in providing market access to Shariah compliant real estate business in the UK and the USA. Gatehouse Bank is a standalone Shariah compliant bank with strong shareholders including a major Sovereign Wealth Fund. It is a great honour and responsibility to align our mutual interests to serve an august institution such as Lembaga Tabung Haji, who celebrate their 50th Anniversary this year. The opening of the Office in Kuala Lumpur has enabled Gatehouse Bank to ensure that its high levels of client and customer service are extended in South East Asia. The Bank is particularly unusual in that it provides a “one stop shop” comprehensive and bespoke service for Institutions, Sovereign Wealth and Family Office interests who are diversifying their real estate sectoral exposures or entering markets like the UK or USA for the first time.”

With a global real estate portfolio worth in excess of £1 billion, Gatehouse Bank specialises in originating, structuring and funding investments in a Shariah compliant manner. To meet continuing investor demand for high quality property investments, Gatehouse Bank provides leading advice and opportunities to investors across a diverse range of properties ranging from retail and offices, to student and logistics sectors.

Other than Gatehouse Bank, Lembaga Tabung Haji was mainly advised by Trowers and Hamlin LLP and Zaid Ibrahim and Co on the deal.