RPMI Railpen, the £30bn (€35bn) UK railways pension scheme, has sold a 45,000sqft London office building to Tikehau Capital and Best Star Real Estate Fedaia (BSREF).

Tikehau Capital has teamed up with BSREF, a partnership between Best Star Real Estate and Fedaia Partners to buy the 83-85 Pall Mall building for an undisclosed amount.

Railpen acquired its leasehold interest in 83-85 Pall Mall for £36.7m (€42.7m) in July 2006.

New owners Tikehau Capital and BSREF said they plan to upgrade the asset into a grade A/energy efficient office building.

Frédéric Jariel, co-head of real estate at Tikehau Capital said: “We are pleased to acquire 83-85 Pall Mall which offers a rare opportunity of office repositioning in a supply-constrained market and prime location. As the occupier market continues to recover, we believe the demand for quality office space that can better accommodate evolving tenant needs will be stronger.

“On a relative basis, we believe that the central London office supply and demand dynamics and investment momentum offer an opportunity for capital value appreciation with attractive risk-adjusted returns.”

The deal is the fourth UK acquisition by Tikehau Capital Real Estate Value-Add fund, Tikehau Real Estate Opportunities 2018, and the first joint venture acquisition by Tikehau Capital with BSREF.

Carmen Alonso, the head of the UK and Iberia at Tikehau Capital, said: “We are pleased to announce this investment in London, which represents a great addition to our existing real estate portfolio and, more importantly, demonstrates Tikehau Capital’s commitment to the UK real estate market and the office sub-segment in particular.”

George Adamopoulos and Pietro Stella at Best Star Real Estate Fedaia, said: “The property offers a rare opportunity to redevelop an iconic building in one of the most recognisable and prestigious office addresses globally.

”This acquisition further solidifies our track record and capability to pursue value-add opportunities in Central London. We look forward to working together to deliver on our repositioning plan for 83-85 Pall Mall.”

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