This Week's London Deal Sheet

The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email [email protected]. 

Real estate investment fund manager Clarion Partners Europe has held the final closing of its core-plus closed-end UK logistics fund, exceeding its target. Equity commitments totalling £427M have been secured from a mix of European, North American and Asian institutions, including investors in Clarion Partners Europe’s previous pan-European logistics strategies.

The fund, with gearing, will provide circa £650M of investable capital and is closed to new investors, Clarion said.

The fund is Clarion Partners Europe’s first to solely focus on the UK, a market it reentered following a seven-year break. It will target a portfolio of high-quality, environmental, social and corporate governance-compliant logistics assets underpinned by strong rental growth fundamentals in established UK logistics hubs, the company said.

“This is an opportune time to be scaling up in the UK, a market with strong long-term property fundamentals and where we have deep experience, and which is witnessing a pricing adjustment the likes of which hasn’t been seen in at least the last 30 years,” Clarion Partners Europe CEO Alistair Calvert said in a statement. 

DEALS

LondonMetric Property is to acquire London-based real estate investment trust LXI in a deal valued at £1.9B, the companies have confirmed.

Under the terms of the deal, each LXI shareholder will receive 0.55 new LondonMetric shares for every share held. This represents a premium of about 9% to LXI's closing price before the offer period began in December.

LXI directors said that they intend to unanimously recommend that shareholders vote in favour of the deal, which is aimed at creating a new major REIT focused on greater scale and sectors with high barriers to entry.

LondonMetric predominantly owns logistic platforms alongside a grocery-led long-income portfolio, while LXI invests in a mix of sectors, including healthcare, budget hotels, theme parks, food stores, industrial, pubs and education.

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Developer Hub and Bridges Fund Management, a specialist sustainable and impact investor, have acquired a vacant 4.5-acre brownfield site adjacent to Bath city centre for £18.5M and plan to transform it into a housing-led scheme within the wider regeneration of the Bath Western Riverside enterprise area.

The redevelopment of the Bath site will deliver build-to-rent and affordable homes, alongside commercial spaces and improved public realm. 

Hub has a growing pipeline, with the completion of over 1,000 BTR homes across three sites due in the next six months. This is Hub’s 14th deal in partnership with Bridges, with the pair on course to deliver over 4,000 homes across a number of living-led developments throughout the UK. 

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Columbia Threadneedle Real Estate, the real estate investment and asset management specialist of Columbia Threadneedle Investments, has acquired Parkgate Shopping Park in Rotherham on behalf of client funds for an undisclosed sum.

Parkgate is one of the top five largest retail parks in the UK, comprising approximately 406K SF of retail warehouse and restaurant space on a 40.6-acre site with circa 2,250 parking spaces. Anchor tenants include Primark, Currys, Next, Poundland, Wren and Matalan with an adjacent Morrisons superstore and another circa 40 retail and restaurant units that range from 1,500 SF to 45K SF.

Parkgate attracts more than 8 million visitors a year and is poised to benefit from the opening of a new 45K SF owner-occupied Frasers store this quarter.

DEVELOPMENT

Oxford Properties and Pioneer Group have appointed Wates Group as the main build contractor for converting Victoria House in Bloomsbury Square into a life sciences hub, which is due to complete in the autumn.

Oxford, Pioneer Group and Wates plan to convert 220K SF of the building’s 300K SF internal area into Grade A wet-lab-enabled life sciences space. The property’s floor-to-ceiling height, internal infrastructure and scale of the floor plates mean it is suited for life sciences conversion, the companies said.

The property will feature 80K SF of office, amenity, meeting and retail spaces, plus an eighth-floor club lounge and a roof terrace overlooking central London.

Following the completion of an initial phase to create an office area on the ground floor of the building, the BioIndustry Association, the trade association for UK life sciences, has taken the space that will serve as its new headquarters.

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McLaren Living has partnered with AEW to redevelop Broad Street Mall and bring forward a new mixed-use neighbourhood in Reading town centre.

The new development is close to local shops, cafés, bars, a theatre and Reading train station.

The proposals to redevelop the southern part of the 4.6-acre site include approximately 600 market and affordable build-to-rent homes and 15K SF of space comprising commercial, retail and leisure. 

McLaren Living plans to submit a planning application to Reading Borough Council in early 2024.

CORPORATE

HqO has acquired Symbiosy, a workspace technology company created by workspace provider HB Reavis, which offers a portfolio of smart building solutions consisting of systems integrations, IoT and software interfaces.

The acquisition expands HqO's geographical footprint in European business hubs including London, Berlin and Warsaw, the company said in a statement.

The transaction follows the company’s announcement of its Series D funding of over $50M, along with the launch of the HqO real estate experience platform.

DEBT

Delancey Real Estate has closed a senior secured three-year, fixed-rate, £19.5M facility to assist Zero Carbon Space, a development platform from Northstar Capital and LandCap seeking to deliver sustainable office space, with the acquisition of 105 Jermyn Street. 

The St. James’s-based property in London’s West End is a 16K SF mixed-use asset, and ZCS intends to carry out a comprehensive refurbishment of the property once proposed planning has been achieved. The debt package represents a loan-to-value ratio of about 70% and the ability for ZCS to request capital for the refurbishment.

Delancey said that it believes 2024 will be an opportune time for its lending business, given the current retreat of traditional financing sources, which is increasing the need for flexible alternative lenders.

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Aviva Investors has completed a private placement to provide £50M in funding to Hightown Housing Association, which owns and manages more than 8,700 homes and care and supported housing projects across Hertfordshire, Buckinghamshire and Berkshire.

The investment will help Hightown continue its delivery of new energy-efficient and affordable housing across the region, Aviva said. The association aims to provide more than 1,000 new homes over the next two years, including its flagship development of 158 homes and three commercial units in Hemel Hempstead, which are due to be completed in April.

Aviva Investors made the investment on behalf of the Aviva UK life annuity business and is the 16th investment made by Aviva Investors into the sector since June 2020. 

SALES

A portfolio of London pubs, including one associated with Victorian serial killer Jack the Ripper, has been put up for sale.

Four pubs run by the East London Pub Company have been put on the market after the firm filed for insolvency in 2023. The portfolio is made up of The Ten Bells, the pub believed to have been frequented by two of Jack the Ripper’s victims, The Gun in Spitalfields, The Saxon in Clapham and The Lock Tavern in Camden.

Savills has been appointed to sell the assets on behalf of the administrator Kroll.