Hermes Real Estate and Canada Pension Plan Investment Board (CPPIB) have agreed to pay £180m (€222m) for a London office tower.

The partnership has agreed a forward commitment on the South Bank Tower property with sellers Jadwa Investment and developer CIT Group.

The joint venture will buy the offices and retail elements, along with the residential ground rent income from the 41-floor tower. The 269,000 sq ft scheme is due for completion between October next year and May 2016.

Speaking at a press conference in London today, Chris Taylor, chief executive of Hermes Real Estate said the south bank district offered good value to occupiers and had “relatively little supply” of offices.

He said: “London’s Riverside is proving attractive for residential and commercial occupiers alike; it is located within the improving cluster of mixed-use developments which have transformed the area between Westminster Bridge and Tower Bridge along the South Bank.”

The UK capital’s office market was, he added, benefitting from a diverse range of sectors and increasing urbanisation.

Last year, the BT Pension Scheme sold £174m of its London property portfolio to CPPIB, forming the joint venture. Aldgate House was the joint venture’s first purchase late last year.

Hermes also announced it has now completed its agreement with The Co-operative Group to bring forward the joint venture’s NOMA scheme in Manchester. The 50/50 partnership will create a 20-acres mixed-use district over the next 10 years.