Healthy Real Estate Opportunities on Harley Street
13 September 2017
Global asset manager Aberdeen Standard Investments is tapping into the growth of medical tourism in the UK and pioneering medical technology with a c.£40m Harley Street real estate investment.
The Standard Life Investments Long Lease Fund has bought the freehold of two buildings at 95 and 97 Harley Street in London’s Marylebone - one of the world’s most famous private medical care districts – from Anglo Suisse Investments Ltd.
The adjoining period buildings are spread over five floors. Number 97 is Grade II listed and was constructed in 1777, whilst number 95 was built in the late 1800s. Both properties were recently refurbished to provide state-of-the-art facilities and cancer treatments at the cutting edge of medicine.
Both buildings are let on long-term leases until 2040 and are guaranteed by HCA International, who form part of the world’s largest private hospital group and is one of the Howard de Walden Estate's1 key tenants.
The properties are on the western side of Harley Street, surrounded by some of the world’s most prestigious medical practices, including The Harley Street Clinic, The London Clinic and The Heart Hospital. The opening of Crossrail in 2018 will mean Heathrow is within a 30-minute journey and Liverpool Street is just 10-minutes away.
Richard Marshall, Fund Manager of the Standard Life Investments Long Lease Fund, commented:
“Harley Street has become a centre of global medical expertise and the growth in private medical tourism has allowed many facilities there to invest in the latest technology and pioneering medical techniques. As a result, real estate here has performed differently compared to other central London office locations with much less volatility over the economic cycle.”
“This specific deal was an exceptionally rare opportunity to buy two prime, period freehold properties on the iconic street. The transaction offers the Long Lease Fund diversification into the healthcare sector and suits its strategy of acquiring prime assets in strong locations, let to good covenants on long leases. It also increases our exposure to alternative sources of income and new trends in real estate. As UK real estate moves into a mature phase of the
cycle, long lease funds offer secure rental income with a substantial yield premium relative to UK Government bonds.”
CBRE represented the Standard Life Investments Long Lease Fund and VANHAN represented Anglo Suisse Investments Ltd.
1 The estate which manages the Harley Street medical area and wider Marylebone district.