AEW has bought the 20,531 sq ft 95 New Cavendish Street, W1, on behalf of a German pension fund.
The property was put up for sale by LBS Properties and BauMont Real Estate Capital for £24m earlier this year.
It has been bought as a value-add opportunity, with planning consent in place for a comprehensive repositioning programme, including the creation of an additional circa 2,000 sq ft floor and communal roof terrace.
The building is currently occupied by real estate consultancy Gleeds UK as its HQ. However, in September this year Gleeds said it was leaving the building after more than two decades for a much smaller office at 60 Berners Street, W1. It will occupy 13,000 sq ft in its new HQ.
Spencer Corkin, head of value-add strategies at AEW, said: “The acquisition of 95 New Cavendish Street provides a compelling opportunity for our client to invest in the London market with a notable redevelopment in a strong micro-location.
“Fitzrovia is currently experiencing a shortage of well-located, state-of-the-art office space with limited new development, which has led to a large supply-demand imbalance and continued upward pressure on prime rents.”
He added: “According to AEW’s research, prime offices are projected to generate the highest returns across all real estate sectors over the next five years, driven by recent re-pricing and increasing occupier demand for high-quality space. This vibrant area of London continues to attract a broad range of occupiers and we believe the transformation of this asset into a modern, sustainable building, will offer attractive space to prospective occupiers while generating value for our client.”
Knight Frank acted for AEW; RX London and Savills advised the vendors.
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