US institution TIAA-CREF and Sweden’s AP1 and AP2 have bought a central London office asset.

The €4bn Cityhold Office Partnership, created last year to target European core assets, paid £102.15m (€140m) for the former headquarters of Great Portland Estates, which sold the building.

The asset, at 60 Great Portland Street, was traded at a 3.89% net initial yield.

The building, which includes office, retail and residential space, is fully let to advertising company The Engine Group until 2028.

Jasper Gilbey, director at TH Real Estate and lead adviser on the investment vehicle, said: “The acquisition is consistent with our strategy of targeting high-quality assets in core office markets that provide attractive long-term growth prospects.

“This transaction is underpinned by a defensive capital value of £1,300 per sq ft,” he said, “and the reversionary nature of the office and retail space provides scope for short-term value enhancement.”

Gilbey said the partnership was looking to grow assets under management from around €2.2bn to €4bn over the next 36 months.

The initial platform includes 2.69m sq ft of core office space in the UK, France and Germany.

The joint venture is also investing in value-add opportunities such as leasing, renovation and development opportunities.