AEW buys value-add London office for German pension fund mandate

AEW has acquired a London office asset for a recently created European value-add real estate mandate from a German pension fund.

The real estate investment manager said it has completed the acquisition of the 1,921sqm office repositioning opportunity at 95 New Cavendish Street in the Fitzrovia district in west London.

The building, which was last refurbished in 1990, has planning consent for a repositioning programme, including the creation of an additional floor with 178sqm of new office space and a communal roof terrace.

The asset is currently fully let on a short-term basis. AEW said it plans to begin redevelopment works in early 2025, once the current occupier has vacated the property. 

Spencer Corkin, the head of value-add strategies at AEW, said: “The acquisition of 95 New Cavendish Street provides a compelling opportunity for our client to invest in the London market with a notable redevelopment in a strong micro-location. 

“Fitzrovia is currently experiencing a shortage of well-located, state-of-the-art office space with limited new development, which has led to a large supply-demand imbalance and continued upward pressure on prime rents.”

Lars-Henning Pylla, fund manager at AEW, said: “We are pleased to have been able to secure this strategically located asset for our investor just shortly after the launch of the new mandate. In the value-add sector it is particularly important to be able to act quickly when opportunities arise.

“We are convinced of the London market’s potential over the next few years and are now focusing on further portfolio expansion in different sectors across Europe’s prime locations.”

As reported last month, AEW was awarded the new separate account mandate from an unnamed German pension fund for the establishment of the value-add real estate portfolio. The investor committed an initial €150m of equity to create the mandate which leverage will have a total investment capacity of €375m.

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