Barings’ Real Estate European Value-Add Fund II (BREEVA II), has acquired an 82,413 sq ft (7,650 m2) office asset in the City of London for £70.65 mln (€85 mln) from global real estate manager, DWS. The deal reflects an initial yield of 4.8%.
25 Moorgate comprises 75,000 sq ft of office space, with 7,800 sq ft of retail and F&B space across the ground floor and basement, and is currently fully let to two tenants.
Acquired as part of a value-add strategy, Barings intends to refurbish the entire building to provide a Grade A office space with leading ESG credentials and wellbeing amenities, including active commuter facilities and a green rooftop garden. Improvements will also be made to optimise the energy efficiency of the building.
BREEVA II is Barings’ second pan-European value-add real estate fund. It recently reached its final close having reached its hard cap of €850 mln after receiving €1 bn of client demand, significantly surpassing the target of €750 mln. It is targeting value-add opportunities across Europe, with a focus on repositioning and build-to-core opportunities in the logistics, alternatives - living and office sectors.
Darren Hutchinson, managing director and head of UK Real Estate Transactions at Barings, said: ‘This was an attractive opportunity to acquire a well-located office asset that offers both income in the short term alongside significant reversionary potential following a comprehensive refurbishment programme. Offices in central London still have immense appeal to occupiers that are keen to attract and retain talent by providing best-in-class space that can facilitate hybrid working not just through the quality of its facilities, but also its proximity to both transport connections and a range of local amenities that will encourage staff to return to the office. Following its refurbishment, 25 Moorgate will be well-positioned to take advantage of the structural trends underpinning office take up and will deliver significantly more value for our initial investment.’
Gunther Deutsch, head of Europe Real Estate Transactions at Barings, said: ‘Following the recent acquisition of a soon to-be-developed office asset on the Southbank in London and an office refurbishment in Milan, we are keenly looking for other office opportunities across our jurisdictions, including Sweden, the Netherlands, Germany, Italy, France and Spain. Aside from well-located existing assets, we are eager to explore joint ventures with developers to build state-of-the-art ESG/net zero office space across Europe as we are strong believers in the attractiveness of these qualities.’
