Barings buys City of London office refurb opportunity for €153m

Real estate investment manager Barings has acquired an office property in the City of London for £130.5 mln (€152.6 mln) on behalf of a core investment strategy.

The 12,000 m2 asset, Capital House, was purchased from a German retail real estate fund managed by global real estate manager DWS, and is currently 55% let to six tenants, including Sainsbury’s and Pret A Manger, with a WALT of 6.2 years.

Barings said the property, dating from 2003, offers opportunities for upgrades and the creation of flexible office space. Plans include the refurbishment of three vacant floors, and adding facilities like showers and bike storage.  

Capital House is located on the north side of King William Street, on the main north-south arterial routes in the City of London linking the Bank of England and London Bridge. The building is 50 metres from Bank station, with access to the Central, Northern, Waterloo & City, Circle and District lines on the London Underground, as well as the DLR. Bank station is currently undergoing a major upgrade to increase its capacity by 40%, which is due to complete in 2022.

Darren Hutchinson, country head of UK at Barings, commented: ‘This transaction allowed us to acquire a prime Grade A office building in the heart of the City of London that also offers a rare opportunity to create unrivalled office accommodation through the repositioning of the building and refurbishment of vacant floors to provide flexible internal and external space to meet current occupier requirements.’

He added: ‘This acquisition is also a clear endorsement of the enduring appeal of London as a global business hub as people begin to return to the office.”

The acquisition is Barings’ fourth office transaction in Europe this year. ‘Compared to other continental markets we see good value in the UK especially in the office, logistics and BTR/student housing sectors,’ said Gunther Deutsch, head of real estate transactions Europe at Barings.

Ronen Ribak, head of real estate transactions, Europe at DWS said: ‘We have taken the market opportunity to sell this A Grade asset and will use the opportunity to further diversify the fund. DWS will continue to seek high-quality assets in key locations and priority sectors such as the wider living sector and offices with ESG related value creation opportunities across the UK and Europe.’

Barings was advised by Savills and CMS.


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