M&G Investments has agreed to a £265m (€300.7m) deal with Anglo American to redevelop the mining company’s London headquarters.

The asset manager said it has exchanged contracts to buy the freehold and will finance the redevelopment of the Charterhouse Estate offices, adding that a 25-year lease will commence upon completion in 2020.

M&G said the capital is being provided by the £3.8bn M&G Secured Property Income Fund, which invests in and develops assets across a wide range of commercial real estate sectors.

In addition to around 146,000sqft office space, there will be 27 residential apartments and warehouse space, at the central London location.

Shailendra Shah, an investment director at M&G Real Estate, said: “We are very proud to have worked in partnership with Anglo American on this significant and prestigious forward funding transaction.

“When completed it will provide high-quality office accommodation in a prime central London location pre-let to a large corporate occupier.”

Ben Jones, a manager of the M&G Secured Property Income Fund, said: “This is a rare opportunity to acquire a large freehold asset in central London. Our FTSE 100 tenant, will provide much-needed long-term cash flows, with fixed uplifts for our pension fund clients.

“This brings the Fund’s exposure to central London office exposure to 22% and demonstrates the continued commitment and investment from both investors and international companies to one of the world’s leading business and finance centres.”