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Hermes seals £118m West London office deal

The deal for the investment management business of the BT Pension Scheme reflects a capital value of £577 per square foot.

Hermes Investment Management, the investment management business of the BT Pension Scheme, has acquired the freehold and effective freehold interests in West London office block 26/28 Hammersmith Grove for in excess of £118 million (€161 million; $181 million).

Hermes bought the 204,506 square foot multi-leased office building from London-based private equity real estate investment manager, Tyburn Lane Private Equity.

Located on the Hammersmith gyratory, one of London’s major transport interchanges, the property has 21 principal tenants and a total passing rental of £5.8 million per annum. The deal value reflects a capital value of £577 per square foot.

“With a number of short term leases due for renewal over the next couple of years, this prime office block also affords an opportunity to undertake an intensive asset management program to drive rents forward,” commented Chris Taylor, chief executive, Hermes Real Estate.

“Well located on a commanding 2.3 acre site, we will also be exploring development opportunities in the future to further capitalise on the area’s continued projected growth.”

Tyburn Lane was set up in 2002 by John Daly and Pat O'Hara, both ex-Anglo Irish Bank bankers. The firm manages three commercial property funds, two invest in the UK and one in Germany. The funds target a net return to investors of between 12 percent and 15 percent per annum.

Tyburn Lane was advised by JLL, while Hermes was advised by Farmer Capital and Savills.