(LONDON) – Hines, the international real estate firm, has sold a c. 20,000-square-foot office building in prime Central London following almost 15 years of active asset management. The asset has been sold, on behalf of Hines European Core Fund (HECF) to a joint venture between Heitman, a global real estate investment management firm with $46.0 billion in assets under management, and Greycoat, an independent real estate company with over 40 years of experience and expertise in the central London office market.
The five-story office building at 15 Suffolk Street, near Trafalgar Square and Haymarket in London’s West End, was originally constructed in the 1950s and was acquired by Hines on behalf of HECF in 2007, following a full refurbishment the previous year. The property is fully let to Stonehage Fleming, the adviser to the many of the world’s leading family offices. Since acquiring the asset, Hines has engaged in extensive asset management activities at 15 Suffolk Street.
Hines has a strong track record of investing in London. HECF capitalized on strong demand for high-quality office and mixed-use space in central London through the acquisition of 7 Soho Square in September 2020, and acquired Dnata City, a prime logistics park beside Heathrow Airport, in November 2020. The Hines European Value Fund series is also active in London, with HEVF 1 transforming an asset above Bond Street Station, rebranded as Oxbourne House, into a premier flagship retail store with high-quality residential accommodation across the upper floors. HEVF 2 has also started work on the redevelopment of Grainhouse, a former Victorian seed warehouse on Drury Lane, which will become the new European headquarters for Hines, and acquired a flagship mixed-use retail and office scheme in the heart of London’s West End at 80 New Bond Street & 325 Oxford Street.
HECF is focused on high-quality office, living, logistics and retail assets in central locations in European gateway cities, benefiting from strong international transport links and local demand for prime workspaces, homes and industrial and logistics space. The Fund integrates ESG and sustainability at the heart of its investment strategy and was named as a Sustainability Sector Leader by GRESB for the fourth consecutive year in 2020.
Simone Pozzato, Fund Manager of Hines European Core Fund, commented: “HECF acquired 15 Suffolk Street in 2007 as a long-term income investment, our first asset acquired in London. Having now completed our extensive asset management activities, this planned disposal crystalizes our investment, delivering strong returns for clients as we rotate our portfolio.
“We retain a pipeline of exciting investment opportunities and remain committed to the UK office market as per our acquisition of 7 Soho Square last year. We are seeing renewed appetite for London offices as employees return to the office, with future-proofed workplaces offering attractive investment prospects and the potential to deliver strong returns to clients. As we review our portfolio, a key element is market timing to ensure we maximize investor returns. We do this by taking an active approach on Core assets, bolstered by the presence of strong local teams on the ground in every country in which we operate. This enables us to manage assets over a long period of time to add additional value to our investments, a strategy we employ across Europe.”
Knight Frank advised Hines on the sale.
Greycoat and Heitman were advised by Cushman & Wakefield.
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 255 cities in 27 countries. Hines oversees investment assets under management valued at approximately $83.6 billion¹. In addition, Hines provides third-party property-level services to more than 367 properties totaling 138.3 million square feet. Historically, Hines has developed, redeveloped or acquired approximately 1,486 properties, totaling over 492 million square feet. The firm has more than 171 developments currently underway around the world. With extensive experience in investments across the risk spectrum and all property types, and a foundational commitment to ESG, Hines is one of the largest and most-respected real estate organizations in the world.
Since entering Europe in 1991, Hines has grown its European platform to include offices in 16 cities as well as a presence in 62 cities in 13 countries. Hines oversees investment assets under management valued at approximately €21.7 billion and provides third-party property-level services totaling 3.9 million square meters in Europe, in Austria, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain and the United Kingdom.
Visit www.hines.com for more information.
1. Includes both the global Hines organization as well as RIA AUM as of 30 June 2021.
About Hines European Core Fund (HECF)
The HECF was set up in 2006 with the aim of providing investors with a resilient income profile derived from a diversified portfolio of high-quality assets located in inner-city locations across major European cities.
As of Q1 2021 the HECF portfolio was 97.7% occupied with an aggregate fund value of c.€2.4bn. The portfolio of the Fund comprises 30 assets including forward commitments, invested in 16 city markets across nine different European countries.
About the Hines European Value Fund Series (HEVF)
HEVF 1 (2017 vintage) raised €721 million of equity commitments, exceeding the original fund target size by over 40%.
HEVF 2 is a euro-denominated, Luxembourg-based investment fund launched in December 2019. Managed by Hines, its objective is to acquire a portfolio of core-plus and value add profile commercial real estate investments throughout the major European markets on behalf of an institutional investor group. Whilst the fund has broad flexibility across sectors, the portfolio is largely focused in Logistics, Residential and Office usages.
HEVF 2 follows its predecessor HEVF 1in continuing the flagship HEVF series for Hines in Europe, alongside the Hines European Core Fund (HECF) open-ended core flagship vehicle.