Backer In Talks For £700M Department Store-To-Office Conversion

Canadian pension fund PSP Investments is in talks to fund the conversion of one of London’s oldest department stores into a new £700M office scheme.

PSP is in talks with the managers of Welput, the London-focused office fund, to co-invest in the redevelopment of the 390K SF House of Fraser department store at 105 Victoria Street in the west of London, React News reported. A department store has been on the site since the 1870s.

The redevelopment will see the creation of a 470K SF office-led scheme, with 12 stories of office above retail and community space around a new area of public realm. 

Existing investors in the Welput fund, managed by BentallGreenOak, will also co-invest in the redevelopment, React said. The project will start in the second quarter of this year, with summer 2026 the target completion date. BH2 is advising on the deal. 

The demise of London department stores is providing a rich source of potential sites for office developers. Four department stores on Oxford Street alone are at different stages of seeing some or all of their space converted from retail to offices, with the end value of schemes ranging up to £750M.

Hines, in partnership with Korea’s National Pension Service; Helical, in partnership with J.P. Morgan Asset Management; and Nuveen Real Estate are the final three bidders to buy the 300K SF development opportunity being offered on Oxford Street by John Lewis. 

One of the stores on Oxford Street, Marks and Spencer, has faced criticism for planning to knock down its existing building rather than retrofitting it, because of the extra carbon a ground-up redevelopment will create. 

Half a mile away, Nuveen has exchanged contracts to buy a 275K SF office building leased to Google and American Express for £155M.