AXA Real Estate Investment Managers (“AXA Real Estate”) announces that, acting on behalf of three clients, it has led the acquisition of Ropemaker Place a prime office building in the City of London for £472 million (approx. €542.8 million) from The British Land Company PLC.
AXA Real Estate has made the acquisition on behalf of a European and two Asian investors in a joint venture structured as a UK Real Estate Investment Trust.
Located in close proximity to the new Crossrail entrance at Moorgate train and Underground station, Ropemaker Place was completed in May 2009 to an Arup Associates design and is a 20 storey 602,000 ft² (approx. 55,900 m²) building providing 571,000 ft² (approx. 53,050 m²) of Grade A office accommodation with supplemental retail and ancillary accommodation. Let to investment grade tenants including Bank of Tokyo Mitsubishi and Macquarie Bank for an average of 14 years, the asset produces a current income of £24million pa (£41/ft²) with minimum contractual increases by September 2015 to £27.5million pa (£47.50/ft²).
The acquisition of Ropemaker Place is in line with AXA Real Estate’s strategy of having clients investing together in assets which have good real estate fundamentals with excellent sustainability criteria. Ropemaker Place has a BREEAM Excellent sustainability rating and is the first building in the City of London to achieve a LEED Platinum pre-certification for sustainability.
The transaction is AXA Real Estate’s second major central London office acquisition on behalf of clients in the past six months and further demonstrates its continued belief in a sector which it expects to continue to perform well.
AXA Real Estate led an investor advisory team which also included Nabarro, Deloitte and Strutt & Parker. The British Land Company PLC was advised by SJ Berwin and Jones Lang LaSalle.
The acquisition of Ropemaker Place follows the forward commitment in September 2012 to purchase a 398,000 ft² (approx. 37,000 m²), 50% pre-let office development in King’s Cross, from developer BNP Paribas Real Estate, in joint venture with a large third party international partner. It also adds to the 485,000 ft² (approx. 45,060 m²) of Grade A office space within the City of London that AXA Real Estate is set to deliver during 2013 and 2014, through three landmark office developments comprising:
- Sixty London, a 235,000 ft² (approx. 21832 m²) scheme located on Holborn Viaduct close to the Crossrail and Underground station at Farringdon
- Six Bevis Marks, a 170,000 ft² (approx. 15,800 m²) project located in the heart of London’s insurance district; and
- One St Paul’s, an 80,000 ft² (approx. 7432 m²) refurbishment project which benefits from its unparalleled location adjacent to St Paul’s Cathedral.
Commenting on the acquisition, Anne Kavanagh, Global Head of Asset Management at AXA Real Estate, said: “This acquisition of Ropemaker Place is a further demonstration of our ability both to source core investment-grade product across Europe and to bring together international institutional investment partners with similar investment criteria into club deals and joint ventures.
“This transaction also highlights our commitment to structuring innovative new real estate investment products for our clients.”
Huw Stephens, Head of UK Transactions at AXA Real Estate, added: “Ropemaker Place has all the solid real estate fundamentals that investors require in a City of London office asset: core location, resilient investment grade cashflows, efficiency in use and the potential of rental growth from a low base, all in a high quality modern building. We expect the asset to meet the investment objectives required by our investment partners. This transaction also underlines our long term belief in the prospects of the London office market, where earlier this year we added to our three developments in the City of London when we agreed to forward fund a large 55% pre-let office development in King’s Cross."
Source: FTI Consulting
