AXA IM-Real Assets sells Grade-A office building in London

London real estate fund

AXA Investment Managers – Real Assets announced that it has sold a 58,517 sq ft freehold Grade-A office building, 20 St Andrew Street, in Holborn, London EC4, for £73.8 million (€85.6 million), on behalf of its first Pan-European Value-Added Venture (“PEVAV I”).

The asset was sold to a private client of National Bank of Kuwait (International) Plc.

20 St Andrew Street was originally acquired in February 2015 and has since undergone a significant asset management plan overseen by Morgan Capital Partners to refurbish the ten-storey property to Grade-A BREEAM Very Good (certified standards) and attract high-quality new tenants, taking advantage of its improving Midtown location and the supply-constrained local market. Refurbishment works, which completed in February 2017, included installing a new façade and reception area, reconfiguring the floor plates to allow for a more efficient use of the lettable areas, and the addition of a new ninth floor together with terraces on the top three floors, providing attractive exterior spaces overlooking the City’s thriving business district. Since its completion, 20 St Andrew Street has been let to eight tenants representing a broad range of sectors and reflecting the diversity of occupiers who favour the Midtown market. 

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The building is centrally located in London’s Midtown district, a well-established office location, with the head offices of a number of major international businesses in the immediate vicinity. The location has improved considerably under AXA IM – Real Assets’ ownership while the strong public transport links are set to further improve with the arrival of Crossrail at the nearby Farringdon station in late 2019.

The disposal of 20 St Andrew Street, following full execution of the asset’s intended business plan, is directly in line with the AXA IM – Real Assetsvalue-added strategy to invest in and create value from underperforming assets with inherently core qualities through a range of asset refurbishment and repositioning activities, as well as letting and re-letting initiatives which aim to generate and/or improve income streams.

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Ian Chappell, Head of Value Add and Development Funds at AXA IM – Real Assets, commented: “We invested into this asset with a compelling business plan and it is with great satisfaction to have seen this successfully executed, allowing us to crystallise the value generated for our clients. This disposal is a fine example of both our ability to deliver on our stated value-add strategy and to the market-leading expertise of the AXA IM – Real Assets’ investment and asset management teams, who worked hard alongside Morgan Capital Partners to secure a property with such attractive growth prospects and then to transform it into the well-let Grade A asset we’ve brought to market. We look forward to continuing this value-creation strategy on behalf of our clients in PEVAV II, our second value-added venture.”

Bassam Khazen, Manager of Commercial Real Estate Investments for National Bank of Kuwait (International) Plc. added: “This acquisition demonstrates sustained appetite by Middle Eastern investors for high quality, income-producing commercial real estate in core locations across Central London.”

Source: AXA Investment Managers – Real Assets