A joint venture between global real estate investment management firm Heitman and independent real estate company Greycoat has acquired a 20,000 ft2 (1,860 m2) office building in prime Central London from Hines.
Hines said the deal followed almost 15 years of active asset management. The five-storey asset at 15 Suffolk Street in the West End was sold on behalf of Hines European Core Fund (HECF). Originally constructed in the 1950s, it is fully let to Stonehage Fleming, a family office adviser.
'We are pleased to acquire Suffolk, a well-located office asset with a rare combination of quality outdoor space and prime location,' said Caleb Mercer, Heitman managing director of European real estate investment. 'As the recovery accelerates and extends, we believe there will be further opportunity for favorable entry points into certain asset types, including office, that have been particularly impacted by the public health conditions and that complement our recent alternative acquisitions.
'The property is our first office acquisition in London since the beginning of the public health crisis and represents our conviction in the recovery of the London office market.'
Simone Pozzato, fund manager of HECF, commented: 'HECF acquired 15 Suffolk Street in 2007 as a long-term income investment, our first asset acquired in London. Having now completed our extensive asset management activities, this planned disposal crystalises our investment, delivering strong returns for clients as we rotate our portfolio.'
HECF is focused on high quality office, living, logistics and retail assets in central locations in European gateway cities, benefiting from strong international transport links and local demand for prime workspaces, homes and industrial and logistics space. The fund integrates ESG and sustainability at the heart of its investment strategy, and was named as a Sustainability Sector Leader by GRESB for the fourth consecutive year in 2020.
Added Pozzato: 'We retain a pipeline of exciting investment opportunities and remain committed to the UK office market as per our acquisition of 7 Soho Square last year.
'We are seeing renewed appetite for London offices as employees return to the office, with future-proofed workplaces offering attractive investment prospects and the potential to deliver strong returns to clients. As we review our portfolio, a key element is market timing to ensure we maximise investor returns.
'We do this by taking an active approach on core assets, bolstered by the presence of strong local teams on the ground in every country in which we operate. This enables us to manage assets over a long period of time to add additional value to our investments, a strategy we employ across Europe.'
As well as acquiring 7 Soho Square in September 2020, HECF also purchased Dnata City, a prime logistics park beside Heathrow Airport, in November 2020. The Hines European Value Fund series is also active in London, with HEVF 1 transforming an asset above Bond Street Station, rebranded as Oxbourne House, into a premier flagship retail store with high quality residential accommodation across the upper floors.
HEVF 2 has also started work on the redevelopment of Grainhouse, a former Victorian seed warehouse on Drury Lane, which will become the new European headquarters for Hines, and acquired a flagship mixed-use retail and office scheme in the heart of London’s West End at 80 New Bond Street & 325 Oxford Street.
Knight Frank advised Hines on the sale.
Greycoat and Heitman were advised by Cushman & Wakefield.
