GreenOak sells Dixon House to MAPFRE at equity IRR in excess of 30%

GreenOak has sold Dixon House on Lloyds Avenue in the City of London to MAPFRE, the Spanish insurance company, for £35.5m, which is believed to have generated an equity internal rate of return in excess of 30% for its investors.

greenoak-logoMAPFRE will occupy the office as its London headquarters, taking approximately 15% of the space, and will fund the completion of the rebuild works at an approximate cost of £15.8m remaining.

GreenOak has been retained to manage the building’s  rebuild and lease-up of the remainder of the space on MAPFRE’s behalf, providing further upside on the deal. The scheme’s leasing agents are Knight Frank and Allsop.

Funds managed by GreenOak acquired Dixon House (pictured below) in July 2013 for £18.1m in an off-market transaction from a private investor with a business plan which comprised a major reconfiguration behind the Grade II listed façade of the building and subsequent lease up. The building had 1.7 years of unexpired income at £1.5m per annum at the time of purchase.

GreenOak secured vacant possession in March 2015, after negotiating lease surrenders from anchor tenant Aviva and Lloyds.

Hero ShotPlanning permission was secured in January 2015 for a Fletcher Priest Architects-designed scheme which comprised: a major reconfiguration of the floor plate; two additional floors, increasing the office block’s net lettable space by almost 12,000 sq ft, or 31%, to 49,476 sq ft. This reflected a gross-net efficiency increase from 73% to 83%.

Refurbishment began in September 2015 and will complete in the first quarter of 2017.

In a statement, Toby Phelps, partner at GreenOak said: “To take the risk off the table in a pretty uncertain world with upcoming risk and market volatility, we are particularly pleased to have crystalized this investment. MAPFRE’s selection of Dixon House is a huge endorsement of GreenOak’s ability to identify under-managed assets and execute asset management plans that can deliver high quality accommodation to today’s modern occupiers.”

Artem Korolev, UK principal at GreenOak said the transaction builds on the investment firm’s track record as “an integrated investor, asset manager and developer in the UK”.

He added: “Having made a number of acquisitions in 2015, we continue to have an active requirement for assets requiring repositioning, refurbishment, planning and leasing in Greater London and the South of the UK where we can use our asset management skills to add value for our investors.”

GreenOak were advised by Berwin Leighton Paisner and MAPFRE by CBRE and Simmons & Simmons.

About CoStar News

Finance Editor, CoStar News
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