Grosvenor launches £200m fund to buy up ageing offices

Click to follow
The Independent Online

The Duke of Westminster's property company, Grosvenor, has launched a £200m fund to tap into London's improving office market in its first UK commercial fund launch since 2005.

The Grosvenor London Office Fund II (GLOF II) has a seven-year lifespan, and will look to buy London offices which need either refurbishment or significant upgrading.

Grosvenor will then, either on its own or in joint ventures, redevelop these buildings improving the quality for new and existing tenants before selling them on.

Mervyn Howard, Grosvenor's UK fund management head, said market research showed that there was a potential 19.4 million sq ft of office space in the West End and 23.6 million sq ft in the City where leases were due to expire. He said coupled with the relatively low level of supply of office space and "when you factor in strong prime rental growth forecasts of 46 per cent in the West End and 34 per cent in the City we are expecting real growth".

Grosvenor, which has £3.6bn of funds under management, has already begun equity-raising roadshows among its global institutional investors. Its Grosvenor London Office Fund I is already fully invested.