“Tikehau Capital, the global alternative asset management group, in a joint-venture with Best Star Real Estate Fedaia (BSREF), a partnership between Best Star Real Estate and Fedaia Partners, today announces the acquisition of the leasehold interest at 83-85 Pall Mall, London.”
“The c45,000 sq ft (4,180 sq m) Grade II listed building, located adjacent to the Royal Automobile Club on Pall Mall, has been acquired from Railpen, the investment manager for the railways pensions scheme. The Royal Automobile Club is the only current tenant in the building, occupying the 4th floor.
Tikehau Capital and BSREF plan to upgrade the asset into a grade A/energy efficient office building, targeting market leading green certifications, to cater to range of occupiers looking for quality space in one of the most sought-after London’s submarkets.
This transaction represents the fourth UK acquisition by Tikehau Capital Real Estate Value-Add fund, Tikehau Real Estate Opportunities 2018, and the first JV acquisition by Tikehau Capital with BSREF.
Frédéric Jariel, Co-head of Real Estate at Tikehau Capital, states: “We are pleased to acquire 83-85 Pall Mall which offers a rare opportunity of office repositioning in a supply-constrained market and prime location. As the occupier market continues to recover, we believe the demand for quality office space that can better accommodate evolving tenant needs will be stronger. On a relative basis, we believe that the central London office supply and demand dynamics and investment momentum offer an opportunity for capital value appreciation with attractive risk adjusted returns.”
Carmen Alonso, Head of the United Kingdom and Iberia at Tikehau Capital, adds: “We are pleased to announce this investment in London, which represents a great addition to our existing real estate portfolio and, more importantly, demonstrates Tikehau Capital’s commitment to the UK real estate market and the office sub-segment in particular.”
BSREF’s George Adamopoulos and Pietro Stella say: “We are delighted to have partnered with Tikehau Capital for the acquisition of 83-85 Pall Mall. The property offers a rare opportunity to redevelop an iconic building in one of the most recognisable and prestigious office addresses globally. This acquisition further solidifies our track record and capability to pursue value-add opportunities in Central London. We look forward to working together to deliver on our repositioning plan for 83-85 Pall Mall.”
The transaction concludes Railpen’s 15-year ownership of the asset. During this period, Railpen has undertaken various value enhancing asset management initiatives, including a head lease regear with The Crown Estate and a rolling refurbishment.
Best Star Real Estate and Tikehau Capital were advised by Savills and DWF. Railpen was advised by CBRE and Mills & Reeve” – Property Funds World