GG Capital over the finishing line in Aberdeen

Investor aiming to up exposure to UK energy capital

  • What GG Capital has bought Equinor House

  • Why The company has been buoyed by the energy markets and oil price

  • What next The asset is let to Equinor for another 10 years

GG Capital has bought Equinor House at Aberdeen Prime Four business park, React News can reveal.

The investor has paid seller Golden Globe Merchants, a UAE-based private equity group, around £20m for the 45,797 sq ft building, a price which reflects a net initial yield of around 7.7%.

Equinor, previously known as Statoil, is the oil, gas and renewables firm backed by the Norwegian government. Equinor is developing offshore wind clusters in the North Sea, including the biggest offshore wind farm in the world and is developing the Mariner, an oil field which is expected to be operational for the next 30 years.

The company has a lease on the building, which was developed by Drum Property, until March 2032. Drum sold the building to Golden Globe in 2018 for £18.7m, which at the time reflected a 6.17% yield.

GG Capital has been buoyed by the rude health of the energy markets, which has experienced dramatic price rises due to constrained gas supply caused by Russia’s invasion of Ukraine, with Aberdeen the energy capital of the UK. Oil prices are at their highest for a decade.

Subsequently, the buyer has increased its focus on the Scottish market and is in the process of making further acquisitions in Aberdeen.

“The Aberdeen market offers an interesting industry fundamental
skewed towards the oil and renewable energies”

Equinor is developing the world’s largest wind farm in the North Sea

The purchase was led for GG Capital by founding partner Karl Abawatt, managing director William Abi Habib and investment associate Robert Karam.

A GG Capital spokesperson said: “The Aberdeen market offers an interesting industry fundamental skewed towards the oil and renewable energies. In today’s macro environment this is a solid rational, underpinned by large Grade A companies located in Aberdeen.

“The entry yield in today’s real estate cycle, and the annual cash on cash on equity offers a comfortable exit down the line in a market that is increasing in liquidity terms and volume.”

Savills acted for GG Capital. BNP Paribas acted for Golden Globe Merchants.