Hermes, Canada Pension Plan make first joint-venture acquisition

GLOBAL – Hermes Real Estate Investment Management and Canada Pension Plan Investment Board (CPPIB) have acquired Aldgate House in London from Railways Pension Trustee Company as part of their 50:50 office joint venture.

The £100m (€119m) deal is the partnership’s first purchase following its formation last July.

The multi-let asset provides more than 214,000 sq ft of high-quality office accommodation next to Aldgate Underground station.

Occupiers include Thomson Reuters, LCH Clearnet and ISG.

The property was sold by a client of Orchard Street Investment Management.

Chris Taylor, chief executive at Hermes Real Estate, said: “The acquisition of Aldgate House as part of our joint venture with CPPIB marks a significant first step in our partnership’s strategy of increasing the size of the portfolio of value-add assets.

"We are anticipating further selective expansion of the partnership with the aim of capitalising upon the robust economic drivers we observe across the central London market.”

Wenzel Hoberg, managing director and head of real estate investments for Europe at CPPIB, added: “This acquisition complements our existing London office portfolio and highlights our desire to grow the partnership with Hermes Real Estate as we continue to execute on our strategy of acquiring high-quality properties.”

The joint venture partnership was advised by Jones Lang La Salle.

GM Real Estate acted for Orchard Street Investment Management (OSIM).

As at 30 June, the CPP Fund totalled CAD188.9bn (€134bn), of which CAD20.9bn represents real estate investments.

Hermes Real Estate had €31.3bn worth of assets under management as at 30 September.

Meanwhile, OSIM has arranged a new £69m loan with Royal Bank of Scotland (RBS) for the Orchard Street UK Special Situations Fund l, formed in 2008.

The loan is to refinance an existing loan with RBS that was due to mature at the end of this year.

The loan is secured against five properties: The Royals Shopping Centre, Southend; Market Walk Shopping Centre, Chorley; Mallard Road Retail Park, Bournemouth; the Meadows Retail Park, Chelmsford; and St David’s Retail Park, Bangor.