APG, the Dutch asset manager whose biggest client is Stichting Pensioenfonds – the National Civil Pension Fund – has teamed up with Delancey to buy London’s Elephant & Castle shopping centre for £80 million (€96 million; $131 million).
The pair are to redevelop the 327,000 square foot shopping mall, which is a famous London landmark and used to be painted pink – as part of the joint venture’s South Village retail and residential development taking in Tribeca Square which is already owned by London-based Delancey’s evergreen fund, DV4, and where 500,000 square feet of residential and mixed use space is being developed in a project including three towers.
The seller of the Elephant & Castle shopping centre is UK property company St Modwen and Salhia Real Estate Company that owns it via Key Property Investments (KPI), a 50:50 joint venture.
KPI has owned and managed the centre for 11 years.
Delancey said its deal built on a residential joint venture with the Middle East’s Qatari Diar at East Village next to the Queen Elizabeth Olympic Park in east London in that it plans to offer the homes at Elephant & Castle for rent rather than for sale. The apartments will be let direct to residents, with no fees and a choice of one, two or three year tenancies and “transparent” rental pricing.
Robert-Jan Foortse, head of European property investments at APG, said it was pleased to reveal its second investment solely focused on the residential rental market in London. “APG firmly believes that this platform will fill a need in the undersupplied London residential market. APG is focused on increasing its residential exposure in Europe, particularly in key cities such as London, given its expected population growth.”