YardNine, the developer formed out of Exemplar, has clinched a major mixed-use development project in Paddington.
Backed by Invesco Real Estate, YardNine has bought 40 and 50 Eastbourne Terrace, W2, for £110m from Hermes Investment Management and Canada Pension Plan Investment Board.
YardNine and Invesco were attracted to the project by the optionality of the £300m project, which has phased redevelopment and refurbishment options as well as some medium-term income.
40 Eastbourne Terrace is an 84,450 sq ft office which is leased to Chicago Bridge & Iron Co, now part of oil engineering firm McDermott, until March 2021. The property will subsequently be refurbished
The redevelopment of 50 Eastbourne Terrace will take place first. Planning is in place for a 94,185 sq ft office and retail scheme with a terrace of seven mews town houses.
The buildings are opposite Paddington station, from which the Elizabeth Line will be operational from the end of the year. The Paddington area has gained strong momentum over the past two years because of a series of high-profile developments, including those at British Land’s Paddington Central campus and the forthcoming Paddington Square by Sellar Property Group.
YardNine was formed at the start of the year by former Exemplar directors Maxwell Shand and Campbell MacDougall after Exemplar’s co-founders, Dan Van Gelder and Clive Bush, decided to have a break from the market.
Eastbourne Terrace is YardNine’s first project without any Exemplar legacy, although the firm won the mandate in January to take on Partners Group’s 240,000 sq ft 80 Fenchurch Street, which had been surrendered by Exemplar.
The sale by Hermes and CPPIB marks the latest in a series of divestments by the joint venture that was formed in 2013 to buy offices in the capital. The jv’s initial eight-building portfolio was subsequently expanded with further purchases, although many of the buildings have now been divested. Last week the duo struck a £94m deal to sell 242-246 Marylebone Road, NW1, to Henderson Park.
Shand said: “40 and 50 Eastbourne Terrace offers an exceptional opportunity to create value through a combination of asset management and development in an appealing submarket that is undergoing significant regeneration.”
Rob Johnston, senior director – UK transactions at Invesco Real Estate, said: “With a part income-producing asset and a consented speculative office and residential scheme ready for development in a location set for increased connectivity, thanks to Crossrail, this is a compelling investment proposition. We are pleased to be working with the experienced team at YardNine on this exciting deal.”
Chris Taylor, head of private markets at Hermes Investment Management, said: “This disposal of 40 and 50 Eastbourne Terrace concludes our proactive management of the asset. Capital from the sale will be redeployed into places which are accessible, sustainable and capable of attracting and retaining talent.”
Farmer Capital advised Hermes Investment Management. Michael Elliott and Colliers International advised YardNine and Invesco Real Estate.
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