New joint venture formed to capitalise on booming London Office market

A 50:50 joint venture partnership to capitalise on the thriving London office market has been formed by Hermes Real Estate Investment Management Ltd and Canada Pension Plan Investment Board. CPPIB is investing £173.9 million to acquire a 50 per cent interest from Hermes’ BT Pension Scheme’s (BTPS) existing portfolio, which comprises 550,000 sq ft of high quality offices, retail and ancillary accommodation, primarily located in London’s West End. Graeme Eadie, Senior Vice-President and Head of Real Estate Investments for CPPIB, said: “We are pleased to be partnering with BTPS and Hermes on this unique opportunity to invest in a high quality, well-diversified portfolio of office properties in prime Central London locations.”

He added: “This acquisition is in line with our strategy to capitalise on attractive opportunities in the London office market and invest alongside well-aligned partners. We see an excellent opportunity to increase the seed portfolio’s value and to grow the venture by acquiring more value-add product in Central London.”

The joint venture portfolio comprises 100 Regent Street, 100 New Oxford Street, 40 Eastbourne Terrace, 50 Eastbourne Terrace, 242 Marylebone Road [pictured], Cheapside House,  20/24 Broadwick Street and 69 Carter Lane.

Chris Taylor, Chief Executive Officer of Hermes Real Estate Investment Management Limited for Hermes said: “We are delighted to be entering into this joint venture partnership with CPPIB as a like-minded long-term global investor. Hermes Real Estate has an excellent performance track record and reputation in the market for deliverability.

“Our ability to source opportunities off-market and act decisively together with a conviction to understand how occupiers assess real estate provides a compelling case for investing in this platform. We firmly believe Central London will continue to deliver attractive opportunities.”