Real estate investment firms Heitman and Greycoat have bought a fully-let 20,000sqft Central London office building from Hines for an undisclosed sum.

The five-storey office building at 15 Suffolk Street was originally constructed in the 1950s and was acquired by Hines on behalf of the Hines European Core Fund (HECF) in 2007.

Caleb Mercer, Heitman managing director of European Real Estate Investment, said: “As the recovery accelerates and extends, we believe there will be further opportunity for favourable entry points into certain asset types, including office, that have been particularly impacted by the public health conditions and that complement our recent alternative acquisitions.

“The property is our first office acquisition in London since the beginning of the public health crisis and represents our conviction in the recovery of the London office market.”

Maury Tognarelli, Heitman CEO, said: “Our investment in Suffolk complements our recent European acquisitions in sectors less correlated to GDP such as self-storage and reflects one of the key thematic strategies we are pursuing in the present environment.

“In this situation, the investment opportunity provides our global portfolio with smart diversification attributes while providing for the potential of capitalization rate convergence often related to mispriced property sectors.”

Simone Pozzato, fund manager of Hines European Core Fund, said: “Having now completed our extensive asset management activities, this planned disposal crystalises our investment, delivering strong returns for clients as we rotate our portfolio.

“We retain a pipeline of exciting investment opportunities and remain committed to the UK office market as per our acquisition of 7 Soho Square last year.”

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