AXA pulls off massive City of London deal

AXA Real Estate has led the acquisition of the Ropemaker Place office building in the City of London for £472 mln (€540 mln).

The European investment manager was acting on behalf of a European and two Asian investors in a joint venture structured as a UK Real Estate Investment Trust.

The vendor was British Land. The UK REIT will top up the rent frees to the contractual rent of £24 mln per annum. The sale represents a net initial yield of 5% on the basis of an acquisition of the units in Ropemaker Place Unit Trust.

The 20-storey Ropemaker Place building was completed in May 2009 to an Arup Associates design. It comprises 571,000 square feet (53,000 m2) of Grade A office accommodation with supplemental retail and ancillary accommodation. The building is located close to the new Crossrail entrance at Moorgate train and Underground station.

Ropemaker Place is let to Tokyo Mitsubishi Bank and Macquarie Bank for an average of 14 years. The asset produces a current income of £24 mln pa (£41 psf) with contractual increases by September 2015 to £27.5 mln pa (£47.50 per square foot).

Ropemaker Place has a BREEAM Excellent sustainability rating and is the first building in the City of London to achieve a LEED Platinum pre-certification for sustainability.

Jones Lang LaSalle and SJ Berwin acted for British Land. On the buyer side, AXA Real Estate led an investor advisory team which also included Nabarro, Deloitte and Strutt & Parker.

Anne Kavanagh, global head of asset management at AXA Real Estate, said: 'This acquisition of Ropemaker Place is a further demonstration of our ability both to source core investment-grade product across Europe and to bring together international institutional investment partners with similar investment criteria into club deals and joint ventures.

'This transaction also highlights our commitment to structuring innovative new real estate investment products for our clients.'

Biriths Land said the sale was in line with its strategy of recycling capital and balancing the company's portfolio between the West End and the City of London. The West End now accounts for half of British Land's our London Office portfolio, up from 46%. The proceeds of the sale will be redeployed into its existing London development programme, British Land added.

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