Columbus UK Real Estate Fund, advised by Columbus Capital Management, has formed a new 50/50 joint venture with the British Airways pension fund to acquire Austin Friars House, London, EC2 for £25 mln (EUR 30 mln), reflecting a yield of 7%.

Columbus UK Real Estate Fund, advised by Columbus Capital Management, has formed a new 50/50 joint venture with the British Airways pension fund to acquire Austin Friars House, London, EC2 for £25 mln (EUR 30 mln), reflecting a yield of 7%.

Constructed in 1989, the freehold building extends to 58,600 sq ft (5,400 m2). It is let to eight tenants and the majority of leases have rent reviews and break options or lease expiries in late 2012.

'We are delighted to be working with the British Airways pension fund again,' said Joe Froud, managing partner of Columbus Capital Management. 'We expect City Office rents to recover strongly over the next 24 months, due to a lack of new supply and the existing leasing structure lends itself to this cycle timing. The building is typical of assets we target; in a good location near the Bank of England, and well configured but in need of physical improvements.'

Paul Scott, head of property at British Airways Pension Investment Management, added: 'We have historically avoided the City office sector due to its past volatility, but this particular opportunity looks to be well positioned for the current cycle.'

BNP Paribas and Capital Real Estate Partners acted for Columbus and British Airways. Allsops advised the vendor.

Earlier this week, Columbus also completed the purchase and leaseback of nine family entertainment centres from AMF Bowling for £15.2 mln, reflecting an initial yield of 9.3%. The centres are located in Ashford, Maidstone, Torquay, Peterborough, Wellingborough, Shrewsbury, Wigan, Carlisle and Stirling and have all been leased back to the combined AMF Hollywood Bowl business for 25 years.