West Midlands Pension Fund has bought St Andrew’s House, 18-20 St Andrew Street, in the City for £25m in partnership with ING Real Estate Investment Management.
The price reflects a yield of 6.6%, and the building will provide an asset management opportunity.
The 1980’s office building comprises 51,000 sq ft on ten levels. It is let to PWC until September 2013 but under-let floor by floor.
ING REIM said the building is located in an improving area close to Land Securities’ highly successful New Street Square, opposite the site of Goldman Sachs’ proposed one million square feet HQ development and close to Farringdon Crossrail/Thameslink station, and offers excellent prospects for growth.
Mike Daggett, ING REIM fund manager for WMPF said: “West Midlands has a strong and diversified portfolio and is comfortable taking on asset management opportunities such as this. The purchase of St Andrew’s House adds to the fund’s existing West End holdings and will enable the fund to take full advantage of the anticipated out-performance of Central London offices over at least the next two or three years.
“The property generates an attractive running yield and provides various options in the medium term for value enhancing asset management, ranging from lease re-structuring to a full refurbishment and the addition of a new floor.”
Cushman & Wakefield acted for West Midlands PF/ING REIM; Savills acted for the vendor.