AXA JV pays £300m for London office project

The Paris-based fund manager and an unnamed client have agreed to buy a 389,000-square-foot development within the largest regeneration project in Europe.

AXA Real Estate has struck up a joint venture partnership with an unnamed third party to buy a significant office development in London for around £300 million (€379 million; $476 million). The 50:50 joint venture is with a large international client, which a spokesman for AXA said would be kept secret, declining to say which region of the world the investor hailed from.

The joint venture partnership is buying a 398,000-square-foot office scheme in the King's Cross area from BNP Paribas Real Estate. The deal involves a forward purchase of the project, which is due to commence construction at the beginning of 2013 and is scheduled for completion in the fourth quarter of 2014. Around 55 percent of the office portion is pre-let to a subsidiary of BNP Paribas on a 15-year lease, and there also will be 13,000 square feet of retail and cafes at the scheme. The project is located in a rejuvenated part of London where some 67 acres of mixed-use development – or 8 million square feet – ultimately is planned, making it Europe’s largest regeneration project.

Though a significant deal, this is not the first time AXA has announced the acquisition of a large amount of real estate through a joint venture with an international investor. In July 2011, the firm revealed a €1.4 billion joint venture with Europe’s largest state fund, Norway’s Government Pension Fund Global. In that instance, the joint venture bought a 50 percent stake in a seven-strong office portfolio from AXA France Insurance Companies to be managed by AXA Real Estate Investment Managers.

AXA’s King's Cross foray also comes in the midst of a development push by the firm in London. The French outfit has a 500,000-square-foot development programme in London’s financial quarter, according to an announcement last September. As part of that, it is developing a mixed scheme at 1 St Paul, near the famous cathedral, on behalf of a single client mandate.