Metrovacesa to invest EUR 1.4 bn in City of London property

Spanish real estate company Metrovacesa will invest up to EUR 1.4 bn to 2015 to acquire and redevelop a 88,000 m² office complex in the central financial district of the City of London. Metrovacesa said in a statement that it has agreed to buy the Walbrook Square complex from London & Regional for about £240 mln (EUR 350 mln). The real estate giant plans to demolish the complex and rebuild a new office block due for completion by 2015. The company will finance the project through its recent EUR 750 mln capital increase, as well as through the sale of non-strategic assets.

The new London office complex will include four buildings with retail space on the ground floor and direct access from London's subway. The project has been designed by architects Foster and Nouvel and will be co-managed by British firm Stanhope. Metrovacesa will hold the rights for a 250-year lease hold on the property as part of the deal. The Spanish company added that the project would provide a return of 7% based on similar projects in London. Jones Lang LaSalle advised Legal & General. Colliers CRE advised Metrovacesa.

Earlier this year, Metrovacesa bought the global head office of HSBC bank at Canary Wharf in London for £1.09 bn (about EUR 1.59 bn), the largest single property deal in UK history. The Spanish group announced this year that it was planning to expand in the UK, Germany, and France, as part of its new growth strategy.