Pension Insurance Corporation (PIC) is acquiring a £267.6m (€304.1m) office building in South London pre-let to the UK government’s property management agency.

The specialist insurer of UK defined benefit pension funds has agreed to buy 2 Ruskin Square in Croydon from the Schroders Capital UK Real Estate Fund (SCREF) in a forward purchase deal. The 344,940sqft office building is expected to be ready for service in August 2024.

The site is being developed by existing funders Schroders Capital, Stanhope as development manager, and Lendlease as contractor.

PIC said the building, which will be let to the Government Property Agency (GPA), will provide PIC with “secure, predictable, long-dated and index-linked cashflows”, which are closely aligned to serving its purpose of paying the pensions of current and future policyholders. 

2 Ruskin Square

Ariel view of PIC’s £268m investment, 2 Ruskin Square, adjacent to Croydon railway station

The 2 Ruskin Square building is PIC’s second purchase of a GPA hub within the past 12 months. In September last year, PIC said it was investing £105m to forward fund a 130,000sqft office building project at First Street in Manchester, let to GPA for 25 years.

James Agar, the head of long income at PIC, said: “Government-let commercial property assets are an important, on-going area of specific focus for PIC, and we are pleased to make this long-term commitment to supporting the greening and modernisation of the UK Government’s estate.

“2 Ruskin Square is a best-in-class development and joins the First Street Hub in Manchester as part of our expanding partnership with the GPA.”

Clive Anderson, GPA’s director of capital projects, said: “The 2 Ruskin Square, Croydon, development is part of the Government Hubs Programme which will provide a smaller, better, and greener estate which supports the Government’s ambition to reach net zero carbon emissions by 2050.”

Rob Cosslett, fund manager at Schroders Capital, said: “The sale of 2 Ruskin Square is in line with SCREF’s strategy of divesting out of assets upon completion of the business plan, having successfully pre-let the office space and with development of the scheme now largely complete.

“We have worked closely with our development partner Stanhope to successfully deliver this best-in-class, highly sustainable building on time and under budget, despite the challenges posed by the Covid-19 pandemic.”

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