Mitsubishi Estate has partnered with Dutch developer Edge to acquire a prominent office tower in London’s West End, previously leased to WeWork, for £150 million. This purchase price reflects a 44% reduction from the £267 million paid by the former owners, a joint venture between Savills Investment Management and Korea’s Vestas Investment Management, in 2018.

The building at 125 Shaftesbury Avenue, boasting a gross floor area of 180,000 square feet, including 140,000 square feet of office space and 40,000 square feet of retail, is situated on a 1.2-acre freehold site within a short walk from the British Museum. After undergoing refurbishment in 2018, the office tower had initially leased its entire office component to Facebook through WeWork.

Following WeWork’s lease termination in 2022, Mitsubishi Estate and Edge saw an opportunity to redevelop the site, incorporating smart office features and sustainable solutions. Shinichi Kagitomi, managing director of Mitsubishi Estate London, expressed enthusiasm about the acquisition, citing the global demand for premium, sustainable, and innovative workspaces. The collaboration with Edge is anticipated to deliver a flagship workplace in the heart of London.

This acquisition represents part of Mitsubishi Estate’s broader European investment strategy, with plans to invest JPY 360 billion in European property assets over the medium to long term. The deal, advised by JLL and Avison Young for Mitsubishi Estate and CBRE and Savills for the sellers, is a reflection of Japanese investors’ increasing interest in the London office market.

In the context of a 50% decline in central London office property transactions and a 21% decrease in workspace leasing in the first nine months of 2023, this acquisition is a notable development. It underscores a trend of Japanese investment in London, following similar acquisitions by Mitsui Fudosan and Daiwa House in the city.

With a total asset value of JPY 7.4 trillion, Mitsubishi Estate’s latest acquisition is a testament to the enduring appeal of London’s property market, even in challenging economic times. The venture with Edge is set to revitalise 125 Shaftesbury Avenue, transforming it into a modern, technologically advanced office space.