Hermes Real Estate has won the battle to buy 26-28 Hammersmith Grove, W6.
Bidding for the office block pushed offers well in excess of the £118m asking price, which represented a 4.74% yield.
The 204,561 sq ft building is let to 31 tenants at a low passing rent of £28 per sq ft, but is considered a prime site in an area expected to command significant rental uplift.
Prime office rents in Hammersmith are £50 per sq ft, according to Levy Real Estate, and nearly 90% of tenants in the building will have lease events between 2015 and 2017.
The block also has potential for as much as 95,000 sq ft of space to be added.
Hermes, owned by the BT Pension Scheme, saw off competition from UK institutions and international fund managers to win the freehold.
A source said: “There is a weight of named requirements in the Hammersmith sub-market, and vacancy is near zero. This deal proves that UK and overseas money is buying into that occupational story.”
JLL was appointed to market the building – home to tenants including Shazam and London Underground – in January. It will be one of the sub-market’s largest office sales.
The vendor, private equity firm Tyburn Lane, bought the block in April 2006 for £74m.
Savills acted for Hermes.
