Property investment manager Barings has paid DWS £130.5 million (€153 million) for a Grade A office building in the City of London.
Capital House, King William Street, which was sold on behalf of a German retail real estate fund managed by DWS, was completed in 2003 and comprises 126,000 sq ft (11,706 sq m) of office, retail and ancillary space on 11 levels.
The property is currently 55% let to six tenants, including Sainsbury’s and Pret A Manger, with a WALT of 6.2 years. Barings said that it plans a programme of active asset management to reposition the building into a best-in-class office with strong sustainability credentials.
Plans include the refurbishment of three vacant office floors, enlarging and renewing the reception area and installing additional showers and bike storage. Central plant and machinery will also be overhauled.
Growing appetite for European office developments and refurbs
The acquisition is Barings’s fourth office transaction in Europe this year it said reflects its growing appetite for attractive office deals in Europe, either as refurbishments or speculative developments.
“Covid-19 made us look much more closely into central business district (CBD) locations as we believe that an attractive location combined with an attractive building quality will continue to be in strong demand by occupiers,” said Barings managing director and head of real estate transactions Europe Gunther Deutsch.
“Compared to other continental markets we see good value in the UK especially in the office, logistics and BTR/student housing sectors. In our key European geographies of the Nordics, the Netherlands, the UK, Germany, Italy, France and Spain, we are still keen to acquire real estate in categories ranging from core to value add including speculative developments and forward transactions.”