Hermes Real Estate and Canada Pension Plan Investment Board have formed a new regional joint venture, buying a 50% stake in a major Leeds development.
CPPIB has bought a half-stake in Wellington Place – a 1.5m sq ft site in Leeds being developed by MEPC, owned by the BT Pension Fund.
The partners are committing £185m of equity to the venture on a 50:50 basis.
The deal follows on from a jv established in July 2013, which saw the purchases of the South Bank Tower, SE1, for £180m in June 2013 and Aldgate House, EC3, for £100m in November that year.
Wellington Place currently has 35,000 sq ft of completed offices, with construction underway on a further 105,000 sq ft.
Hermes Real Estate chief executive Chris Taylor said: “Our partnership with CPPIB in London has grown significantly since its establishment in July 2013 and it is a natural next step for both parties to develop the partnership further.
“Hermes Real Estate has recently demonstrated its commitment to the regional UK property market through a series of major urban renewal schemes in Birmingham, Leeds and Manchester, and as a like-minded, long-term investor, CPPIB is the right partner to take the Wellington Place project forward with us.
“With a proven track record in delivering sustained growth in line with occupational demand drivers, MEPC’s management will remain at the heart of the scheme’s development and ensure Wellington Place is well-placed to capture future economic growth.”
CPPIB managing director Andrea Orlandi said: “We are pleased to build on our existing partnership with Hermes Real Estate through this exciting development in Leeds and see this as a strong complement to our existing office portfolio in London. Together with Hermes Real Estate and MEPC, we aim to make Wellington Place the new premier business location in Leeds with state-of-the-art office space, an attractive public realm, great transport links and full access to amenities.”
