Capital House
Site acquired

Site acquired

28/07/2021 by Buildington
Investment manager Barings has acquired Capital House from a German retail real estate fund managed by global real estate manager DWS for £130.5m.

The stone clad building was originally built in 2003 by Sir Robert McAlpine, comprising 126,000 sq ft of office, retail and ancillary space over basement, lower ground, ground and eight upper floors.

The building is currently 55% let to six tenants, including Sainsbury’s and Pret A Manger, with a WALT of 6.2 years.

Barings plans for improving the building include the refurbishment of three vacant office floors, enlarging and renewing the reception area to provide tenant amenity, as well installing additional showers and bike storage and overhauling central plan and machinery. The refurbishment of the 6th and 8th floors will focus on the existing terracing and provide high quality internal and external space which will give enviable space in the heart of the City.

Darren Hutchinson, Managing Director, Real Estate Country Head in United Kingdom at Barings, said: “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. 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.”

Gunther Deutsch, Managing Director, Head of Real Estate Transactions Europe at Barings, commented: “This transaction is our 4th office transaction in Europe this year which reflects our still growing appetite for attractive office acquisitions across Europe, be it refurbishments or new speculative developments. Covid-19 made us look much more closely into central business district (CBD) locations as we believe that an attractive location combined with an attractive building quality will continue to be in strong demand by occupiers. Compared to other continental markets we see good value in the UK especially in the office, logistics and BTR/student housing sectors. In our key European geographies of the Nordics, the Netherlands, the UK, Germany, Italy, France and Spain, we are still keen to acquire real estate in categories ranging from core to value add including speculative developments and forward transactions.”

Ronen Ribak, Head of Real Estate Transactions, Europe at DWS added: “Over the term of our ownership Capital House has delivered attractive risk adjusted returns in terms of income growth and capital appreciation for our investors. 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.

See Capital House profile for photos and team credentials.
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