TIAA Henderson pays €220m for London bank property

TIAA Henderson Real Estate (TH Real Estate) has acquired an office building in the West End of London from Legal & General Property for £175 mln (€221 mln).

The investment volume reflects a net initial yield of 4.34%.

Located at 440 Strand, the 16,700 m2 property is the headquarters of private bank Coutts & Co, which is often referred to as the 'Queen's bank' as it counts the British monarch among its client base. Coutts is the wealth division of Royal Bank of Scotland Group.

The property has been acquired on behalf of the Henderson UK Property Unit Trust. The principal tenant, Royal Bank of Scotland, has a 23-year lease on the property. Some 80% of the building comprises office space, while the remaining 20% is let to a mix of retail tenants, restaurants and coffee shops.

Marcus Langlands Pearce, director of UK Property Unit Trust at TH Real Estate and co-manager of the Henderson UK Property Unit Trust, commented: ‘By owning a landmark property in Central London, the deal further enhances the tenant strength and yield on the £2 bn Henderson UK Property Unit Trust. Our strategy is to increase the Fund’s exposure to Central London and the property at 440 Strand provides a defensive, core asset with growth potential.

The Henderson UK Property Unit Trust has acquired £600 mln worth of assets over the course of 2014, including Capital Park in Cambridge, the new Heineken distribution centre in Derby and the Asda in Luton. The fund is currently valued at over £2 bn.