Global asset manager AEW has acquired an office repositioning opportunity at 95 New Cavendish Street in London's Fitzrovia district.
The transaction has been concluded on behalf of its recently announced discretionary separate account mandate for a German pension fund, which has a focus on establishing a value-add real estate portfolio in major European markets.
Spencer Corkin, 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.
'According to AEW’s research, prime offices are projected to generate the highest returns across all real estate sectors over the next five years, driven by recent re-pricing and increasing occupier demand for high-quality space.'
The asset currently comprises 1,921 m2 of office space arranged over lower ground, ground and four upper floors. The building, which was last refurbished in 1990, has planning consent for a comprehensive repositioning programme, including the creation of an additional floor with 178 sqm of new office space and a communal roof terrace.
Sustainability features will include a new LED lighting system, smart meters to monitor energy consumption, greenery on the roof terrace to introduce biodiversity, and dedicated entrances for cyclists - including cycle racks, showers and changing rooms. Designed to a high specification, the project will target net zero carbon, both embodied and operational, and BREEAM ‘Excellent’ and WELL Platinum certifications.
The asset is currently fully let to a property consultancy business on a short-term basis, with works expected to begin early 2025 once the occupier has vacated.
Lars-Henning Pylla, fund manager at AEW, added: '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.'
AEW was advised by Knight Frank and Mishcon de Reya.
Photo: ©Stiff & Trevillion
