AXA IM, Blackrock JV sells London office to Citi for £220m

AXA IM, Blackrock JV sells London office to Citi for £220m

The 50:50 venture between AXA Investment Management – Real Assets and BlackRock Real Estate has sold 6 Bevis Marks to Citi Private Bank five years after buying it as a development opportunity.

AXA Investment Management (IM) – Real Assets and BlackRock Real Estate have sold the 6 Bevis Marks building in London to Citi Private Bank, the subsidiary of banking conglomerate Citigroup for £220 million ($318 million; €280 million).

The joint venture between AXA IM, the real assets investment arm of the investment management business of French Insurer AXA, and BlackRock Real Estate, the real estate investment management business of global asset management firm BlackRock, sold the asset on behalf of private clients.

The partnership acquired the 174,550 square foot office building in 2011 as a development opportunity and began construction with no pre-let tenants. It was fully completed in 2014, topping out at 15 storeys, and is now almost fully let to a range of strong, long-term tenants.

“Having completed this project’s acquisition in 2011, we made the decision to press ahead with a large non pre-let development at a time when there was virtually no new construction being commenced in the City of London,” said Huw Stephens, head of UK transactions, AXA IM.

“Within three years we delivered a brand new grade A office building, in a prime City location, into a market where demand had returned but supply was at historic lows. The building is now almost fully let and we have been able to complete an exit of what is now a trophy asset at an attractive price which provides a strong return for our clients,” he added.

Liam Le Roux, of BlackRock’s UK real estate business, said the firm’s ability to achieve an attractive price, despite some market uncertainty in the UK referendum “spoke volumes” for the quality of the building and of its tenants. “The UK is an important strategic market and we are actively pursuing new value add opportunities across a number of sectors,” he added.

A spokesman for AXA IM said the firm had acquired over £6.8 billion of transactions in London since 2009, including a £220 million deal for the City-based 22 Bishopsgate in February last year and the £80 million Asticus Building in Victoria last week.

In 2014, BlackRock sold two prominent City of London-based office buildings. First was the sale of Moorgate Exchange to Brookfield Property Partners, the spin-off of New York-based Brookfield Asset Management, for £211 million. This was followed by the unloading off Exchange Tower to Hong Kong-based private equity real estate firm Gaw Capital for £191 million.

Citi Private Bank has global assets under management, as of December 31, 2015, of $374 billion.

Cushman and Wakefield and JLL acted on behalf of the joint venture.