EPISO fund sells London office to Hermes at 7.1% yield

European Property Investors Special Opportunities (EPISO) has sold an office asset in southwest London to the UK asset manager Hermes Real Estate. The investment volume of £58 mln (EUR 70 mln) reflects a net initial yield of 7.1%.

The property, Wimbledon Bridge House, was sold by a subsidiary of EPISO, the opportunistic fund managed by AEW Europe and Tristan Capital Partners.

Wimbledon Bridge House, a development purchased by the fund in September 2009 for £40 mln, comprises 15,500 m² of office accommodation, four retail units and a car park with 300 spaces. It was completed in 1989. The building is currently 100% let to six office tenants and four retailers, including WH Smith and Next.

Ric Lewis, CEO of Tristan Capital Partners and the EPISO fund portfolio manager and adviser said: 'The UK market, which has seen the fastest re-pricing in the recent downturn of any major European real estate market, is now benefitting from strong institutional investor interest, particularly in core assets.

'This robust demand and attractive pricing is the background against which the fund decided to take profits for its investors after a relatively short period of time. We will, however, continue to seek additional investments in the UK that meet the strategic, diversification, and return targets of our funds.'

Merrick Marshall, executive director at AEW Europe added: 'With two new lettings recently completed at Wimbledon Bridge House, it was an opportune time, and earlier than planned, to take advantage of the strong demand from institutions and other investors for this type of core asset. The deal comes hot on the heels of EPISO's sale of the City Place House, London office asset, in May.'

AEW Europe worked with Bellhouse Joseph to implement the asset management strategy for Wimbledon Bridge House. Strutt and Parker acted for AEW Europe in the sale.