Union Investment has acquired Procession House at 55 Ludgate Hill, London from Goldman Sachs Merchant Banking Division and British developer Greycoat. The acquisition of the office property is being made for the portfolio of open-ended real estate fund UniImmo: Europa. The purchase price was not disclosed.
“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 Iranyi, Head of Investment Europe II 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.”
Constructed in 1999, the building was comprehensively 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 sustainability rating of “Excellent”. Completion of work on the 10,200m² multi-tenant property coincided with the closing of the transaction in May of this year.
The office accommodation covers 8,700m² 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 500m². The remaining space is earmarked for retail, restaurants and storage. The basement contains 141 bicycle parking spaces plus changing rooms and showers. The highlight of the building is that tenants enjoy an unobstructed view of St Paul’s Cathedral. 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.
Procession House occupies a highly sought-after prime location with outstanding transport links. Situated on Ludgate Circus on the western side of the City of London, it is close to St Paul’s Cathedral and the Old Bailey. The building straddles City Thameslink station, which lies between Farringdon and Blackfriars stations. There are also direct links to Luton and Gatwick airports, both of which can be reached in around 50 minutes.
Adam Iranyi said: “The micro-location will be further improved with the opening of Crossrail’s new Elizabeth line in 2021. The Elizabeth line will run from Paddington through the West End, via Farringdon and the City of London to Canary Wharf. It will also extend west to Heathrow, thus providing a direct route between the City of London and Heathrow Airport with a journey time of just 30 minutes.”
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.”