Delancey and Australian superfund Aware Super are under offer to acquire Aviva Investor’s and PSP’s core multi-let office at 11-12 Hanover Square, W1, for £165m.
The pair have come out as frontrunners in a competitive bidding process, which saw bids exceed the £160m asking price, which would have reflected a 4.1% net initial yield.
Bids are understood to have hit prices of around £165m or more, which would take the yield below 4%.
The duo announced they had formed a £1bn real estate investment partnership in October last year.
The announcement stated the partnership’s initial focus was on prime central London offices to capitalise on “strong demand from investors and occupiers for grade-A assets amid significant structural and regulatory change in the market and its repricing”.
The 46,765 sq ft, eight-storey Campbell Architects-designed building generates a total annual income of around £6.7m, which equates to just under £143 per sq ft.
The building is comprised of grade-A office space above Oxford Street-facing retail space, with terraces on the fifth, sixth and seventh floors.
The retail unit, currently undergoing refurbishment and set to reopen in Q2, is let to New Balance Athletic Shoes until mid-2031 at an annual rent of £2.47m.
The offices are currently let to Summit Partners, EK Capital and Promeritum Investment Management at an average rent price of £126.30 per sq ft.
The asset was marketed as an opportunity to capitalise on rental growth in the area. Leases in the building are set to expire in July 2028, with guiding rents nearby in the range of £185 to £220 per sq ft and forecast to grow by a quarter over the next five years.
Knight Frank and Newmark are advising Aviva and PSP on the sale.
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