Real Estate

Aware Super and Delancey to invest up to £1bn in London’s office sector


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One of Australia’s largest pension funds is making a major bet on central London offices alongside property group Delancey, marking a vote of confidence in a sector hit by high interest rates and questions over post-pandemic demand.

Aware Super plans to invest up to £1bn in offices across the capital with the real estate group founded by Jamie Ritblat, which this month agreed to buy investment bank Lazard’s new base at 20 Manchester Square, opposite The Wallace Collection museum, for about £120mn.

The partnership comes as investors take diverging views on the office sector, with some seeing depressed valuations as a buying opportunity, and others put off the asset class by the shift to hybrid working.

“We get most excited where there is a real contrarian opportunity,” said Damien Webb, Aware’s head of international and deputy chief investment officer. Webb said the £1bn could be deployed over as little as 12 to 18 months, depending on market conditions. 

Aware opened its first international office in London in November with a pledge to invest £5.25bn across the UK and Europe. This year it took a minority stake in London-headquartered fibre platform euNetworks and Octopus Energy. 

Jamie Ritblat
Aware Super has partnered with Delancey, founded by Jamie Ritblat © Delancey

Those deals came after the fund bought Qatari Diar’s 22 per cent in Get Living last year, a rental landlord launched by Delancey whose properties include the east London Olympic estate.  

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Support from Australia’s third-largest pension scheme comes as the government has been courting global investors, with UK Prime Minister Sir Keir Starmer vowing to “rip up” bureaucracy at a summit earlier this month. 

“We are very pleased with our choice of the UK . . . there’s still lots of opportunity in the UK and we’ve got a lot more to do,” said Webb. 

Aware’s latest move also marks a major vote of confidence in London offices from a large international investor following two years when such buildings proved difficult to sell amid a wider market slump in commercial property.

The downturn was triggered by higher interest rates, which increased financing costs in a sector heavily reliant on debt to fund deals. Added uncertainty over the post-pandemic future of hybrid working has pushed European office values down about 37 per cent on average from their peak in 2022, according to Green Street research.

Aware and Delancey said prices were looking cheap at present, adding that a lack of investment in new developments combined with strong demand for the best buildings — those in central locations with high sustainability ratings — would lead to a supply crunch and rising rents in the years ahead. 

Investors buying into the sector claim that any slowdown in demand is disproportionately hitting the bottom segment of the market, while the best buildings will remain sought after. Land Securities estimates that just 10 per cent of buildings account for 90 per cent of London’s vacancy rate.

But given the lack of big deals, there is still uncertainty around where office prices will settle now that many more companies allow working from home. 

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“We think London has repriced well. There haven’t been a lot of transactions to date. As you start to see some traditions and you start to see some pricing, you will gather momentum,” said Webb, adding that there was “not perfect harmony . . . just yet” between buyers and sellers on what prices offices should command. 

Several large buildings in London have come on the market in recent months, including Brookfield’s Citypoint tower and Nuveen’s “Can of Ham” — which will help to establish a baseline for larger sales. 

Stafford Lancaster, Delancey’s chief investment officer, said “the market is quite illiquid at the bigger lot sizes” and that the two investors could differentiate themselves by “being able to write those cheques”. 

The strategy could include investing via joint ventures or preferred equity — and backing schemes to fix up older blocks, or buying good quality assets such as 20 Manchester Square. 

The block, bought from Invesco, was once the headquarters of EMI records and features in the cover photo of The Beatles’ album Please Please Me. Lazard is expected to move in next year.



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