Barings Fund Buys London Office Bldg

Barings Fund Buys London Office Bldg For £70.65mil

UNITED KINGDOM – On behalf of Barings Real Estate European Value-Add Fund II (BREEVA II), diversified property investment managers Barings has purchased an 82,413 sq ft office project in the City of London for £70.65 million from global real estate manager DWS, according to a press release published on Thursday evening (10 March, SGT).

The transaction works out to a capital value of £857 psf and an initial yield of 4.8 percent.

Known as 25 Moorgate, the mixed-use commercial property consists of around 75,000 sq ft of office space, as well as about 7,800 sq ft of retail and F&B space across the basement and ground level. At present, the asset is fully leased to 2 tenants.

Strategically located in the heart of the City of London, the integrated development is well-linked to local and national transport links via London Underground and National Rail stations, including Bank, Liverpool Street and Moorgate.

It is also poised to benefit from the opening of the Elizabeth Line, which will provide easy access to Heathrow Airport, in addition to commuter towns like Shenfield in the east and Reading in the west.

Purchased as part of a value-add strategy, Barings plan to renovate the entire office building to provide best-in-class, Grade A office space with leading ESG credentials and well-being amenities. These include active commuter facilities and a green rooftop garden. Upgrades will also be undertaken to enhance the energy efficiency of the commercial property.

“This was an attractive opportunity to acquire a well-located office asset that offers both income in the short term alongside significant reversionary potential following a comprehensive refurbishment programme,” said Darren Hutchinson, Managing Director and Head of UK Real Estate Transactions at Barings.

“Offices in central London still have immense appeal to occupiers that are keen to attract and retain talent by providing best-in-class space that can facilitate hybrid working not just through the quality of its facilities, but also its proximity to both transport connections and a range of local amenities that will encourage staff to return to the office. Following its refurbishment, 25 Moorgate will be well-positioned to take advantage of the structural trends underpinning office take up and will deliver significantly more value for our initial investment.”

Notably, BREEVA II is Barings’ 2nd pan-European value-add property fund. It recently hit its final close after reaching its hard cap of €850 million after receiving €1 billion of client demand, largely exceeding its target of €750 million. It is looking to invest value-add opportunities across Europe, with a focus on repositioning and build-to-core opportunities in the logistics, office, and alternative living sectors.

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