ARA Dunedin Asset Management, a joint venture of UK property investor Dunedin and South Korean real assets fund manager ARA Asset Management, has confirmed two major acquisitions in the UK for over £500 mln (€550 mln).
The company, acting on behalf of capital partner, Singapore-listed Suntec Real Estate Investment Trust , has bought a 50% stake in the landmark Nova Estate in London’s Victoria from Canada Pension Plan Investment Board (CPP Investments) for a price said to be around £430 mln. It also inked the purchase of the Bourne Business Park in Surrey on behalf of Straits Real Estate (SRE).
Having originated and executed the transactions, ARA Dunedin has been appointed by the manager of Suntec REIT and SRE to provide ongoing local asset management and owners’ representation services for their Nova and Bourne investments.
The landmark Nova Estate comprises 480,292 sq ft (44,620 m2) of Grade A office accommodation and 78,811 sq ft of food and beverage space across three state-of-the-art buildings that were completed in 2017.
Nova, situated next to Victoria Station in the heart of London’s prestigious West End, is let on a long-term secure basis, with a weighted average lease term to expiry of approximately 11 years. Multi-let with a highly diversified rent roll, there are currently 17 office tenants, constituting approximately 90% of total rental income, and 18 food and beverage and leisure tenants.
The estate, which has a BREEAM ‘Very Good’ rating for its office component and 'Good' rating for its retail component, also boasts sustainability features such as a central energy centre providing low carbon heating and cooling, rainwater harvesting and pedestrian-friendly public realm space of up to two acres.
Chong Kee Hiong, CEO of ARA Trust Management (Suntec) Limited, manager of Suntec REIT, said: ‘We are pleased to make our first foray into the UK with the acquisition of Nova, which is a strategic fit with Suntec REIT’s existing portfolio of high quality commercial assets in Singapore and Australia. These two premium Grade A office buildings will enhance the resilience, diversification and quality of Suntec REIT’s portfolio. The ARA Dunedin team has contributed to the acquisition with its strong local support and in-depth knowledge of the UK market.’
Bourne Business Park in Addlestone, Surrey comprises six standalone office buildings totalling approximately 182,364 sq ft of net lettable area. The buildings were constructed between 1999 and 2017, with the majority newly built or extensively refurbished over the past four years and benefiting from excellent sustainability credentials including BREEAM ‘Excellent’ certification.
Bourne is currently 96% let to multiple tenants from diversified industries including medical, legal, electronics and logistics and is of strategic importance to many of its tenants as it serves as their UK, European or global headquarters.
Commenting on the acquisitions, Mark Ebbinghaus, chairman of ARA Dunedin and CEO of ARA Europe said: ‘We remain positive on the office sector as an investment asset class, particularly in key landmark London precincts as well as in well-connected and decentralised regional locations in the UK.’
‘The sale of Nova Phase One is the culmination of a long-term and highly successful joint venture development project with Landsec, who remain a valued and trusted partner of CPP Investments,’ said Tom Jackson, managing director, head of UK Real Estate, CPP Investments. ‘The project has been a huge success, as a large and high-quality mixed-use development scheme that has significantly revitalised the area around Victoria station. It represents one of the most successful developments in London in recent times and has delivered solid returns for the more than 20 million contributors and beneficiaries of the Fund.’
CPP Investments disposed of its interest in the adjacent future development parcels within the broader Nova Victoria estate to Land Securities, in a separate transaction that completed in June 2020.
