M&G Investments (M&G) has agreed a £265 mln (€300 mln) deal with Anglo American, the FTSE-100 listed global mining company, to redevelop its London headquarters.
M&G has exchanged contracts to acquire the freehold and will finance the redevelopment of the Charterhouse Estate offices. A 25-year lease will commence upon completion in 2020.
The capital is provided by the £3.8 bn M&G Secured Property Income Fund, which invests in and develops assets across a wide range of commercial real estate sectors, including retail, hotels, offices, student accommodation, healthcare, leisure and residential.
'We are very proud to have worked in partnership with Anglo American on this significant and prestigious forward-funding transaction,' said Shailendra Shah, investment director, M&G Real Estate.
'When completed it will provide high-quality office accommodation in a prime central London location pre-let to a large corporate occupier.'
In addition to approximately 146,000 ft2 (13,560 m2) Grade A office space, there will be 27 residential apartments and warehouse space, at the central London location by Farringdon station.
The development will also be home to diamond company De Beers Group, majority-owned by Anglo American. The Charterhouse Estate in Farringdon has been part of the De Beers Group portfolio since the 1930s and has historical links to nearby Hatton Garden.
'Farringdon continues to attract corporate occupiers who want the benefit of a central London location and the prospect of improved transport links with the impending opening of Crossrail,' added Shah.
'This is a rare opportunity to acquire a large freehold asset in central London. Our FTSE 100 tenant, will provide much-needed long-term cashflows, with fixed uplifts for our pension fund clients,' said Ben Jones, manager of the M&G Secured Property Income Fund.
'This brings the fund’s exposure to central London office exposure to 22% and demonstrates the continued commitment and investment from both investors and international companies to one of the world’s leading business and finance centres.'
M&G Investments was unrepresented. BNP Paribas Real Estate advised Anglo American.