(LONDON) The Aviva Investors Property Trust has completed the purchase of 21 New Street, an office property situated within 100 metres of Liverpool Street Station, London.
The building, occupied by the banking, financial services and insurance sectors, in addition to the City of London Police, was purchased for close to £30 million, reflecting a net annual yield of over 5%.*
The location and surrounding areas is expected to undergo further improvement with the opening of the Crossrail station at Liverpool Street, projected to be operational in 2018. This will be the only station in London to provide direct services to both Heathrow and Stansted.
The nearby Spitalfields Market complex and Broadgate have also recently undergone refurbishment and redevelopment, with significant investment also expected in the adjacent Devonshire Square estate over the coming years.
Philip Nell, manager of the Aviva Investors Property Trust, said:
“21 New Street is situated in a popular location and is a property in which we feel can attract significant rental and capital growth in the future.
“Although the fund is currently strategically underweight to “growth implicit” central London assets, we feel this property offers a unique opportunity to add significant value through refurbishment, extension and repositioning of the asset based on our medium term outlook for risk adjusted returns in this sub-sector.”
Aviva Investors believes that the outlook for UK commercial property appears increasingly positive. The third quarter of 2013 saw the pace of the UK’s property market recovery accelerate significantly, which led Aviva Investors’ real estate team to revise upwards its near-term UK market return forecasts for 2013 from 7.6% to 10.0%, with similar returns forecast for 2014. In offices, the financial services sector has particularly shown the effect of the pronounced pick-up in economic sentiment seen over the summer months.
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Notes to Editors
The information and opinions contained in this document are for use by the financial press and media only, and do not purport to be full or complete. No reliance may be placed for any purpose on the information or opinions contained in this document nor should they be seen as advice. Past performance is not a guide to the future. The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.
Some of the information within this document is based upon Aviva Investors estimates. These have been calculated by Aviva Investors Real Estate Strategy and Research Team based on data sourced from recent market transactions. There is no guarantee that the forecast returns will be achieved and therefore should not to be relied on by anyone else for the purpose of making investment decisions.
Unless stated otherwise any opinions expressed are those of Aviva Investors Global Services Limited (Aviva Investors). They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature.
Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 15 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £246 billion at 30 September 2013.
- Aviva provides 34 million* customers with insurance, savings and investment products.
- We are the UK’s largest insurer and one of Europe’s leading providers of life and general insurance.**
- We combine strong life insurance, general insurance and asset management businesses under one powerful brand.
- We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.
* DTZ February 2014.
** Based on Aviva plc Annual Report and Accounts 2012.
*** Based on aggregate 2011 UK life and pensions sales (PVNBP) and general insurance gross written premiums
Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: St. Helen’s, 1 Undershaft, London EC3P 3DQ. Authorised and regulated by the Financial Conduct Authority and a member of the Investment Management Association.
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