Global alternative asset management group Tikehau Capital has acquired the leasehold interest at 83-85 Pall Mall, London in joint venture with Best Star Real Estate Fedaia (BSREF), a partnership between Best Star Real Estate and Fedaia Partners.
Financial details were not disclosed.
The 45,000 ft2 (4,180 m2) Grade II listed building, located adjacent to the Royal Automobile Club on Pall Mall, has been acquired from Railpen, the investment manager for the railways pensions scheme. The Royal Automobile Club is the only current tenant in the building, occupying the 4th floor.
Tikehau Capital and BSREF plan to upgrade the asset into a grade A / energy efficient office building, targeting market leading green certifications, to cater to range of occupiers looking for quality space in one of the most sought-after London’s submarkets.
This transaction represents the fourth UK acquisition by Tikehau Capital Real Estate Value-Add fund, Tikehau Real Estate Opportunities 2018, and the first JV acquisition by Tikehau Capital with BSREF.
Frédéric Jariel, co-head of real estate at Tikehau Capital said: 'We are pleased to acquire 83-85 Pall Mall which offers a rare opportunity of office repositioning in a supply-constrained market and prime location.
'As the occupier market continues to recover, we believe the demand for quality office space that can better accommodate evolving tenant needs will be stronger.
'On a relative basis, we believe that the central London office supply and demand dynamics and investment momentum offer an opportunity for capital value appreciation with attractive risk adjusted returns.'
Carmen Alonso, head of the UK and Iberia at Tikehau Capital added: 'We are pleased to announce this investment in London, which represents a great addition to our existing real estate portfolio and, more importantly, demonstrates Tikehau Capital’s commitment to the UK real estate market and the office sub-segment in particular.'
