Canadian pension fund giant CPPIB and UK investment manager Hermes Real Estate are buying the South Bank Tower in London for €164 mln in a forward-funding deal.

Canadian pension fund giant CPPIB and UK investment manager Hermes Real Estate are buying the South Bank Tower in London for €164 mln in a forward-funding deal.

Hermes and CPPIB (Canada Pension Plan Investment Board) are buying the mixed-use scheme as part of their 50:50 London partnership from Saudi boutique merchant bank Jadwa Investment and private equity group CIT.

The transaction price amounts to £133 mln (€164 mln), according to a CPPIB spokesperson.

South Bank Tower, which was previously known as King’s Reach Tower, is currently being redeveloped with completion expected between October 2015 and May 2016. It will comprise 269,000 sq ft (25,000 m2) of office and retail accommodation, along with 191 residential apartments across 41 storeys.

CIT and Jadwa bought the building out of receivership for £60 mln in June 2010.

Chris Taylor, CEO of Hermes Real Estate, said: 'South Bank Tower is a major mixed-use development in a thriving part of London’s Riverside which is proving attractive for residential and commercial occupiers alike; it is located within the improving cluster of mixed-use developments which have transformed the area between Westminster Bridge and Tower Bridge along the South Bank and which is rapidly becoming a destination of choice for major occupiers.'

CBRE advised Hermes Real Estate on the transaction.

Hermes and CPPIB established their central London office joint venture in July last year, which saw CPPIB invest £174 mln for a 50% share in an eight-asset portfolio. More recently the partners also bought the 214,000 sq ft Aldgate House for £100 mln.