Aviva Investors, the global asset management platform of UK insurer Aviva, has made a £67 million (€92.2 million; $103.4 million) investment in a London office occupied by British broadcaster BBC, in a deal reflecting a yield of just 3.75 percent.
The platform, which manages more than £23 billion of property as part of a wider £245 billion asset portfolio, announced it had purchased the first refurbished part of the Television Centre development in White City, which is the headquarters for BBC Worldwide, the broadcaster’s global channel.
Aviva acquired the property from a joint venture between London-based property company Stanhope and Tokyo-based property company Mitsui Fudosan. Mitsui Fudosan owns a 25 percent stake in Stanhope and invests in property development in the UK via the partnership.
The sale sparks a partial exit from the Television Centre for Stanhope after it acquired the property in 2012 for £200 million in a consortium with Mitsui Fudosan and Alberta Investment Management Corporation, the Canadian institutional investment manager.
Aviva paid a price that reflected a historically low yield for its part in the development, with few transactions in London’s office market reflecting going-in yields of below 4 percent. However it has acquired an asset subject to a lease to a blue-chip tenant in the BBC that runs for 25-years and is subject to annual and uncapped rent increases.
It acquired the asset for its Lime Property Fund, an open-ended core real estate fund that was launched in 2004 and today has more than £1.4 billion of assets. Renos Booth, manager of the Aviva Investors Lime Property Fund, said: “This is an impressive building with iconic status. It is a great addition to our portfolio and will complement the existing assets as we look to generate a secure and predictable income stream for our investors.
“White City is undergoing significant regeneration with Television Centre as the centre of gravity for that regeneration and the area becoming increasingly attractive to occupiers looking for high quality accommodation in the capital. It has strong transport links into Central London and future rental growth is expected. Today’s acquisition provides the opportunity to capitalise on this emerging growth story whilst still in its infancy, to the benefit of our clients.”