TH Real Estate snaps up £100m London office

The deal is the first on behalf of the €2.2 billion pan-European office platform TH Real Estate’s parent company TIAA-CREF has with Swedish National Pension Funds AP1 and AP2.

TH Real Estate, the London-based real estate asset management firm owned by TIAA-CREF, has acquired a London office, 60 Great Portland Street, for £102.12 million (€140 million; $150 million). The price reflects a net initial yield of 3.89 percent.

The transaction is the first on behalf of the €2.2bn pan-European office vehicle established by TIAA-CREF and Swedish National Pension Funds AP1 & AP2 back in August.

The joint venture is seeded with existing office properties owned by the TIAA General Account, AP1 and AP2, creating a platform valued at €2.2 billion. However, with the purchase of 60 Great Portland Street, the platform also has kicked off an active investment program with new capital from the TIAA General Account, AP1 and AP2 targeting an additional €2 billion of investment over the next 3 years.

The platform, named Cityhold Office Partnership, has purchased the former West End headquarters of Great Portland Estates from the London-listed property investment and development company. The offices are let in their entirety to advertising firm The Engine Group, on floor-by-floor leases, expiring in January 2028, providing an unexpired term of just over 12 years. The property also includes three multi-let retail units totaling 13,200 square feet and 17 residential apartments.

“Our ambitions are to grow assets under management in the Cityhold Office Partnership from [around] €2.2 billion to €4 billion [plus] over the next 36 months,” commented Jasper Gilbey, director at TH Real Estate and lead adviser of the investment vehicle.

“The acquisition of 60 Great Portland Street is consistent with our strategy of targeting high-quality assets located in those core office markets that provide attractive long-term growth prospects.”

Knight Frank acted as broker on behalf of Great Portland Estates, while Savills advised TH Real Estate.