M&G Real Estate has acquired the freehold interest in 108 Cannon Street, London EC4 from Chenavari Investment Management for approximately GBP21.5 million.
The purchase was made on behalf of the M&G Property Portfolio, which is managed by Fiona Rowley and deputy manager Justin Upton.
The building is let to Rabobank at a rent of GBP2,115,000 per annum until the end of the year, generating an initial income return in the order of 9.5 per cent.
Rabobank has sublet the majority of the accommodation to BBVA.
Earlier this year development managers Beltane Asset Management secured planning permission for a comprehensive refurbishment and extension of the building to provide 40,000 sq ft of office accommodation. Development will commence at the end of the year.
Rowley says: “We’re very happy to have completed this acquisition off market at a time when opportunities are very limited. The property is extremely well located within the City and will benefit from the planned Bank station capacity upgrades and the proposed new station entrance directly opposite. The acquisition is in line with the fund’s strategy of acquiring active management assets with strong fundamentals that can drive performance.”