A London and US based firm are investing in Central London offices, starting with a redevelopment of 75 London Wall.
First there was a £90 million recapitalisation of a 162,000 sq ft multi-let office asset at 55 Mark Lane, followed by Castleforge’s flagship 500,000 sq ft office redevelopment at 75 London Wall
Castleforge LLP and New Jersey-based Conversant Capital will look to make further acquisitions, with the latter contributing £150 million to the Castleforge Partners V fund.
Michael Kovacs, founding partner at Castleforge, said: “I’m excited to be working with Michael and his team. Our two organisations have a lot of overlapping relationships and think very similarly about investing.
“Central London remains one of the most dynamic office markets in the world, yet the imbalance between supply and demand is now more pronounced than ever.
“With Conversant’s support, we are well-positioned to deliver prime, well-located office space at a time when companies are looking to bring employees back to the office and prioritise quality, connectivity, and sustainability.
“Our investment in 75 London Wall, a rare, large-scale redevelopment that will provide London with a new benchmark for high-quality, future-proofed workspace epitomises this strategy.”
The pair are looking to take advantage of return-to-office strategies and relocations to more central, transport-connected submarkets.
They said construction cost inflation and a more burdensome regulatory environment have limited new development starts, creating a shortage of high-quality office space.
The Fund is structured to invest in more than £1 billion of total asset value over the next several years.
Michael Simanovsky, managing partner of Conversant Capital, said: “Our partnership with Castleforge reflects our conviction in London’s office market and in our collective ability to identify and unlock value.
“We believe the current dislocation in the sector presents an exceptional opportunity, where limited new supply and rising demand create the conditions for outsized risk-adjusted returns.
“With our two firms’ deep domain expertise and relationships, coupled with a flexible mandate to invest across the capital structure, this Fund is structured to capture opportunities others cannot, combining downside protection with significant upside potential.”