Barings sells London office for €201m

Global real estate investment manager Barings has sold Capital House, a premium London office building, to Japanese investor Daibiru for £169 mln (€201 mln).

Capital House, London

Barings, managing a European real estate fund, bought the property in 2021 for £130.5 mln. IT subsequently invested over £11 mln (€13 mln) in upgrades, including renovated office spaces, a new reception, improved amenities like bike storage and charging points, and new terraces.
The building, located on King William Street near the Bank of England, spans nearly 11,148 m² across eight floors and boasts EPC B and WiredScore Platinum certification, while targeting BREEAM Excellent. Its 11 tenants include Rothschild and Redburn, among others. The ground and lower floor retail space is let to Pret A Manger and Sainsbury’s.
Darren Hutchinson, managing director and head of UK Transactions at Barings Real Estate, said: “The extensive repositioning of Capital House, including comprehensive office floor and common part refurbishments and subsequent lettings, has resulted in a high-quality asset worthy of its excellent location, with a world-renowned set of businesses calling it their working home. We’re pleased to have concluded this deal with Daibiru Corporation, ahead of our business plan following its off-market approach, which has served to reinforce our conviction in prime offices in central business districts that benefit from first-class transport links. We are now looking to redeploy the proceeds to create further high-quality assets.”
Gunther Deutsch, managing director, head of European Transactions and Country Head Germany at Barings Real Estate, said: “This transaction highlights why select office opportunities, in the right locations and with the right amenities, remain among our preferred investments across Europe, whether through developer JVs, refurbishments, or change of use transformations that create strongly in-demand high-quality office space. Alongside the office sector, logistics and living remain at the top of our list in terms of acquisitions, mainly with core+ to value-add risk-return profiles.”
Stephen Down, chairman of Savills Central London Investment, commented: “There is much speculation on the supposed resurgence of global real estate investment from Japan, but compared to the boom period of the late 1980s I expect this to be a steady flow rather than a torrent, with a wider sector spread of offices, logistics and living. It is a strategic diversification of funds, targeting relatively limited geographies that are recovering from the market corrections over the past two years, and where long-term returns are higher than in the Japanese domestic market.”
The property will serve as the new European and African headquarters for Mitsui O.S.K. Lines and its subsidiaries. 
Barings was advised by RX and CMS (legal), while Daibiru was advised by Savills and Clifford Chance (legal).
Daibiru's acquisition of Capital House marks its first foray into the UK, a key step in its 2035 growth plan, which prioritizes international expansion. This makes the UK the fifth country where Daibiru operates, joining Vietnam, Australia, the US, and India. Daibiru sees London, a major financial center with a transparent and liquid market, as a highly attractive investment location.