Global real estate investment manager Hines has acquired the City of London's Worship Square offices from HB Reavis in an off-market-transaction.
CoStar News understands that Hines paid circa £185 million for the Grade A office scheme at 65 Clifton Street. The new owner said the off-market transaction was made on behalf of one of its funds.
The 139,000-square-foot property, which put on the block for £200 million, provides workspace across nine floors with terraces and amenities. It was completed by HB Reavis last year and is 97% leased.
Occupiers include global technology company Wise and European economic consultancy Frontier Economics. The building also hosts flexible workspace, with the lower ground and basement floors operated by HB Reavis’ HubHub brand.
Alfonso Munk, global co-head of investment management at Hines, said in a statement: "We are delighted to make this acquisition at a time when compelling demand-supply dynamics for prime office space in London have created an extremely favourable backdrop for rental growth.
"Occupiers are demanding high-quality, amenity-rich office space in the city’s best locations, and this building delivers on every front. Our research shows a growing bifurcation between best-in-class offices and the rest, and Worship Square positions us firmly on the right side of that trend."
Jake Walsh, managing director at Hines, added: "This investment, made on behalf of a Hines-sponsored fund, aligns with the firm’s global strategy to focus on prime assets across all asset types in gateway cities, delivering resilient income and positioning its portfolio to benefit from new macroeconomic and geopolitical trends shaping the future.
"HB Reavis’ long-term strategy continues to centre on premium projects and long-term asset management, while retaining the flexibility to respond to opportunities which support the strategic optimisation of its portfolio.
"In this context, transactions such as the sale of Worship Square create additional capacity for the company to advance new development opportunities in the United Kingdom and Germany, which remain key markets in its development strategy."
In December, Central European real estate developer HB Reavis said it had secured a £106 million real estate investment green loan from HSBC UK to refinance its development finance facility for the building.
The net-zero building has secured an EPC A rating, WiredScore Platinum and SmartScore Platinum. It is also targeting WELL Platinum, BREEAM Outstanding and NABERS 5-star rating.
HB Reavis Developments chief executive Steven Skinner also said: "Worship Square is a landmark, multi-award-winning UK project that embodies our long-held strategic focus delivering highly sustainable and healthy workplaces that put the occupier at the heart. The calibre of occupier and attracting a near 100% occupancy at building completion is testament to the quality of development. The completion of the asset sale to Hines enables additional capital to reinvest into our existing development pipeline.
"With limited Grade A availability and rising construction costs, businesses have been driving a flight to quality, prioritizing modern, sustainable and well-located offices. Institutional liquidity is also returning to the London office market, reinforcing confidence in prime assets like Worship Square."
Savills and CBRE advised HB Reavis. Cushman and Wakefield advised Hines.