Fund manager M&G has purchased a prime office asset in London for £78.3 mln (€92 mln) on behalf of an Asian separate account mandate.
Saffron House comprises 73,000 ft2 (6,780 m2) of space and is located less than 200 metres away from Farringdon station. It is currently 81% let, has a strong leasing history and was comprehensively modernised in 2019. The property boasts circa 5,500 ft2 of external terraces.
M&G plans to refurbish the vacant lower ground floor to maximise light and space, in addition to enhancing the entrance on Saffron Hill to provide direct access on that level.
TeckLeong Kee, fund manager, M&G Real Estate Asia, said: 'M&G’s ability to source quality good assets and complete the transaction in under two months is a reflection of the breadth and depth of our global team.
'Saffron House’s strong fundamentals coupled with the positive post-Covid outlook in the UK commercial sector and at an all-in entry price, which provides a strong spread over the 10-year UK government bond yield.'
The deal marks the second such acquisition as part of the client’s broader strategy to invest in value add opportunities following the £111.7 mln purchase of Fleet Place House in October 2020.
Paul Crosbie, who leads M&G’s UK value add initiatives, said: 'Central London’s large, liquid market and deep tenant base will continue to appeal to a diverse range of occupiers.
'The effects of the pandemic have underlined the importance of future-proofed office accommodation; ensuring a safe, workplace with health and wellbeing amenities to welcome back and retain staff.
'In our view, the physical office will remain central to workplace strategies, albeit with occupiers being more discerning with regards to location and quality.'
