London Office Deal Takes U.S. Firm’s Spending Past £1.25B In UK This Year

U.S. private equity investor Ares Management has completed a deal to buy a West End office for £135M, which takes its spending in UK real estate to more than £1.25B this year.

Ares bought Times Place at 45 Pall Mall from J.P. Morgan Asset Management, according to CoStar. The price reflects a yield of 4.3% and a capital value of £2,668 per SF. 

The 60K SF building is let to eight tenants, CoStar reported, with one recent letting commanding £127.50 per SF. 

Ares is one of the most acquisitive investors in London and the UK, completing a range of deals in multiple sectors using different types of capital. 

Its largest was a £418M preferred equity investment in the Wembley Park build-to-rent assets of Quintain, the developer owned by Lone Star, which also invested £337M. The new money will allow Quintain to build out the remaining 2,500 homes at the north London scheme. The deal was undertaken by Ares' debt fund business.

In May, Ares bought a portfolio of 21 hotels leased to Accor for £400M from Landsec that the UK REIT considered noncore. That deal is part of a spate of private equity portfolio deals in UK hotels.

In the logistics world, it purchased a 1.2M SF portfolio of assets across the UK from Royal London Asset Management.

Ares has completed two further deals in London, picking up a £61M portfolio of assets in the West End from Shaftesbury Capital and the £44M long leasehold of the 45K SF 25 Charterhouse Square in the City from Helical. 

Los Angeles-based Ares has raised more than $300M (£238M) for a new fund targeting value-add European real estate. It received its first commitments in April for the Ares European Property Enhancement Partners IV fund, which has an equity target of £1.6B.