Pontegadea, Spanish billionaire Amancio Ortega's real estate businesses, is in the driving seat to buy 33 Foley Street, an office redeveloped by Kier in London's Fitzrovia, from Abrdn for around £80 million or a circa 4.5% yield, CoStar News understands.
The Standard Life Investments Long Lease Fund bought the former BBC office from Kier Property in a sale-and-leaseback transaction in 2017 for £70 million. Savills is advising Abrdn on the sale.
Kier had completed a full redevelopment and extension of the building to create a total of 42,000 square feet of Grade A offices. As part of the purchase, Standard Life Investments secured a 25-year lease, with inflation linked rent reviews, to Kier Group which relocated its Kier Property office from Cavendish Place in January 2018.
The building was originally built as a printing works in the 1920s.
The West End market will be lifted by evidence of strong bidding for the asset with the price thought likely to reach the guide of £80 million.
According to Savills' recent figures, 2023 has started slowly in the West End in a continuation of the fourth quarter's subdued activity. Only two transactions took place in January with a combined volume of approximately £165 million. Over the past five years, January has witnessed average volumes of £493 million, spread across eight transactions, it adds.
Pontegadea remains a busy investor in European real estate and in particular larger trophy assets.
In February, The Times reported Pontegadea had dropped plans to buy the European headquarters of Meta Platforms in Dublin after the Facebook parent had instructed agent Cushman & Wakefield to sublet some of the space to a new occupier or occupiers following a spate of job cut at its business units.
Savills declined to comment.