Hines secures mixed-use scheme in London’s West End

US developer-investor Hines has acquired a flagship mixed-use retail and office scheme in the heart of London’s West End on behalf of the Hines European Value Fund 2 (HEVF 2).

The 37,414-sqft (3,475 m2) building arranged over lower ground, ground and five upper floors is uniquely positioned with dual frontage on to both New Bond Street and Oxford Street (80 New Bond Street & 325 Oxford Street).

Acquired from Aviva Investors for an undisclosed sum, the building is currently multi-let to four tenants with vacancy available as of August 2020. Hines will embark on a comprehensive reconfiguration and refurbishment to enhance and reposition the asset as prime retail space on the lower floors, with prime grade A office space above.

This is the second landmark acquisition Hines has secured on the internationally famous street with the highest footfall in Europe. The property is located just 130 metres east of 354-358 Oxford Street, above the Bond Street Underground station, which the firm acquired in late 2018 on behalf of the Hines European Value Fund 1, and has rebranded as Oxbourne House. Hines is transforming that asset into a premier flagship retail store with high quality residential accommodation comprising 11 units across the upper floors.

This latest acquisition is the third for HEVF 2, bringing the amount of equity allocated by the fund to €300 mln. Hines recently announced the first closing of the fund, securing €637 mln of equity commitments in just three months after its launch, exceeding 50% of the final €1.25 bn fund raising target. When factoring leverage, HEVF 2 is expected to have total purchasing power approaching €3 bn, making it Hines’s largest closed-ended fund in Europe to date.

Jake Walsh, director, Hines UK, said, 'Oxford Street and Bond Street are among the world’s most iconic and popular retail streets. With the eagerly anticipated adjacent Hanover Square Development completing later this year and the delivery of Crossrail on the way, this location is positioned to capitalize well on localized trends, and will be a unique shop window for any global brand in an unparalleled location.'

Paul White, HEVF 2 fund manager, said, 'This is a fantastic flagship acquisition for HEVF 2. It epitomizes the HEVF series philosophy of sharp focus on prime locations in prime markets, and on assets that the Hines in-house skillset can actively improve to create new core real estate. When we are finished with this building it will be a mixed-use trophy in arguably the best retail location in Europe, and offering coveted Mayfair office space. We’re excited, and backing our high conviction in the London opportunity today.'

Gary Sherwin, Head of UK Transactions, Aviva Investors, said, 'The fund in which the property is held is increasing its allocations into assets with secure income streams, including pre-let office and hotel investments in Cambridge and Manchester, which are key locations in our real estate investment strategy. We continue to have appetite for prime retail assets in cities with strong economic fundamentals, including those that are attractive tourist and leisure destinations. However, we will sell properties when we can achieve an attractive return for our clients and believe the proceeds can be better redeployed elsewhere, including our strong pipeline of office development opportunities in London. The sale of this asset met our objectives through a competitive bidding process.'

Hines was advised by Savills and Aviva Investors was advised by Knight Frank.

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