Nuveen has agreed to sell the ‘Can of Ham’ office building at 70 St Mary Axe in the City of London for approximately £340 million in a deal signalling improving confidence in the London office investment market. The buyer is Capreon, the investment company owned by the Noé family, which partnered with alternative investment manager Hayfin Capital Management to acquire the 300,000-square-foot building. This transaction represents the largest sale of a London office building in the past three years and reflects growing investor appetite for high-quality London offices positioned for rental growth.

The agreed price equates to a yield of about 5.6%, surpassing an earlier £330 million offer from Blackstone in March that Nuveen ultimately rejected. Nuveen’s decision to pull out of the prior deal was based on expectations that the market value of European real estate assets, particularly in London, would improve. This move came amid ongoing challenges for the commercial office sector, including post-pandemic shifts in working patterns and higher borrowing costs that had dampened investor enthusiasm earlier in the year. The building itself remains fully let to 13 tenants, with leases averaging five years until their first break, underscoring sustained demand for premium office space.

The ‘Can of Ham’ is a 24-storey elliptical office tower designed by Foggo Associates and completed in 2019, featuring approximately 41,258 square metres (around 444,000 square feet) of office space. Its unique design and prime City of London location have made it a notable addition to the capital’s skyline. The property benefits from expansive reception areas and landscaped public realms at ground level, as well as well-appointed tenant amenities such as bike storage, lockers, and showers. Tenants include prominent firms across sectors such as law, energy, technology, and consultancy, reflecting a diverse and stable tenant base.

Average rents at the building are around £68 per square foot, aligning with market data that shows rents have risen significantly in London due to limited new office supply. Even office spaces of Grade B quality have reached rents of £75 per square foot in some areas, signalling potential for further rental growth at a modern asset like the Can of Ham. This upward rental trend confirms investor interest in acquiring well-located, high-quality office properties that were leased to multiple tenants several years ago and are now positioned to benefit from market recovery.

The involvement of Hayfin Capital Management—a credit specialist traditionally active in sectors such as distressed Spanish residential property—is notable in this transaction. Hayfin joins other alternative investors including Elliott Investment Management and Ares Management, which have increasingly targeted London offices to achieve higher returns amid evolving market dynamics. For Capreon, this purchase marks their second London office acquisition in 2024, following their earlier purchase of 132 Goswell Road in Farringdon.

While the commercial real estate sector in London has faced significant headwinds with the rise of hybrid working and economic uncertainties, transactions like this deal reflect a cautiously optimistic turnaround. Nuveen’s strategy to hold out for a higher price and eventually secure a deal above prior offers illustrates confidence in the medium-term outlook for well-positioned London offices. As rent growth continues and new supply remains constrained, investor demand for these assets is becoming more pronounced, signalling potential stabilisation and recovery in what had been a challenging market.

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Source: Noah Wire Services