Global property fund manager Stenham said its Third UK Property Fund has made its first investment with the purchase of a one-third stake in a Grade A office building in London. The landmark property, located at 1 Victoria Street, Westminster, in London, is let to the First Secretary of State, a government department, on a lease until February 2021, with no break clauses. The next rent review date is January 2011, Stenham said in a statement.

Global property fund manager Stenham said its Third UK Property Fund has made its first investment with the purchase of a one-third stake in a Grade A office building in London. The landmark property, located at 1 Victoria Street, Westminster, in London, is let to the First Secretary of State, a government department, on a lease until February 2021, with no break clauses. The next rent review date is January 2011, Stenham said in a statement.

The acquisition comprises about 31,900 m2 over basement, lower ground floor and eight upper floors as well as 105 covered parking spaces. The investment amount was not disclosed.

'The purchase of 1 Victoria St represents a significant investment for Stenham. We have been able to take advantage of property fund redemptions evident in the market place to acquire value', said Paul Arenson, managing director of Stenham Property. 'This property is attractive to us as the rent, at an average of £26 per sq ft, is well below current market levels. Also, the initial yield, especially when combined with the prospective yield at the next review, will deliver positive cash flow against cost of funds. The unutilised site coverage provides potential for active management, enhancing value in due course.'

Th Stenham UK3 Property Fund was launched in March 2008 and is due to be listed on the Channel Island stock exchange in June this year. Stenham, which manages the fund, has about £1.4 bn of assets under management of which about one third located in the UK. the company has focused more heavily on opportunities in Germany, Switserland and Japan over the past three years. Germany currently accounts for over half of its portfolio.