German investment and asset manager Union Investment has acquired an office property in London from Goldman Sachs Merchant Banking Division and British developer Greycoat.
Financial details were not disclosed but the price is reported to be about £140 mln (€157 mln).
The deal for Procession House at 55 Ludgate Hill, near St Paul's Cathedral and the Old Bailey, was made for the portfolio of open-ended real estate fund UniImmo: Europa.
'The British office market has performed very robustly in recent years despite the economic uncertainty in the wake of the Brexit referendum and the coronavirus pandemic,' said Adam Irányi, head of investment Europe at Union Investment Real Estate.
'London is set to remain one of the world’s leading business centres, with an attractive office market. Because of its strong position, the London office market will be among the first to see rent growth when the current crisis is over,' Irányi added.
Constructed in 1999, the building was refurbished by the two vendors in conjunction with John Robertson Architects to include new building services, lifts and a 4th floor terrace. The building has been awarded a Breeam Excellent sustainability rating. Completion of work on the 10,200 m2 multi-tenant property coincided with the closing of the transaction in May of this year.
The office accommodation covers 8,700 m2 of space from the ground floor up to the penthouse level on the 5th floor. There are also two terraces on the 4th and 5th floors with a combined area of 500 m2. The remaining space is earmarked for retail, restaurants and storage.
Some 92% of the space is already let, with the main tenants being alternative asset manager the Intermediate Capital Group (ICG) and accountancy firm Crowe UK. Both leases run for 15 years.
Irányi added: 'The micro-location will be further improved with the opening of Crossrail’s new Elizabeth line in 2021.'
Chris Semones, managing director, Goldman Sachs Merchant Banking Real Estate, commented: 'We are proud to have partnered with Greycoat and to successfully conclude our investment in Procession House.
'Collectively, we executed on a value-add strategy to comprehensively redevelop the building to offer new Grade A office space which we have successfully pre-leased to two high quality tenants. Now that the asset has been stabilised we are delighted to be transacting with an investor of Union Investment’s calibre.'
After Watermark Place and The Copyright Building, Procession House is the third investment in London for UniImmo: Europa, and the fourth investment in the UK. Following the acquisition, the UK share of fund assets has increased from 6.95 to 8.0%.
