(This story has been updated to confirm the offices bought.)
Praxis has exchanged to buy the 123,000-square-foot home of Bank of America in Bromley, south east London, for £20.7 million in a sale-and-leaseback transaction, and splashed a further £35 million on most of the offices remaining in Columbia Threadneedle Investment's PAIF UK property fund.
Praxis has signed a 10-year leaseback to the US banking giant over most of the building at Bank of America House at 26 Elmfield Road. The building has 21,000 square feet of vacancy that is now due to undergo a comprehensive refurbishment.
This deal coincides with Praxis’s acquisition of most of the office component of Columbia Threadneedle’s PAIF portfolio for £35 million. The transaction includes assets in Birmingham, Luton and Bristol totalling 300,000 square feet.
Columbia Threadneedle began dealing again at the end of February in its £358 million CT UK Property Authorised Investment fund, the only direct UK property fund to gate after the economic turmoil sparked by the Liz Truss government's so-called mini Budget.
The CT UK PAIF had temporarily suspended dealing on 10 October 2022 following a "significant increase in redemption requests which had led to cash in the fund reducing to a level where future redemption requests would not be able to be met until an orderly sale of assets had been completed".
The offices Praxis is understood to have bought are: 1300 Parkway North, a 30,175-square-foot office in Bristol, with 140 car parking spaces leased to the Secretary of State for Defence; Unit H1, Harlequin Office Park in Bristol, a 26,871-square-foot office let to ALD Automotive; 400, 450, 475 Capability Green in Luton, a freehold office campus of three detached buildings totalling 90,495 square feet; Buildings 4, 7,8 & 9 at Quinton Business Park in Quinton comprising 77,451 square feet of offices; and Birmingham International Park in Solihull, three detached Grade A office buildings arranged over three storeys and 70,966 square feet.
UK property fund outflows continued in April, even as investors turned more positive on other kinds of funds, according to the latest Fund Flow Index from Calastone.
Calastone reports that investors sold a net £24 million of their property fund holdings, more than the £14 million of net selling in March. That means April was the ninth consecutive month that the sector has seen outflows.
Praxis, which has been a major investor in regional offices in recent times, did not confirm the offices bought from Columbia Threadneedle.
Charlie Arden, investment director at Praxis, said in a statement: "The Bank of America deal marks our 11th acquisition so far in 2023 and demonstrates all the key attributes we are looking for in an office deal. Prime location, commitment from the existing tenant, flexible floorplates and a constrained leasing market. We now have an ablity to take the asset on a decarbonisation journey to deliver best-in-class, Grade A space across the vacancy.
"We remain convicted based on experience that where we deliver high quality space, our asset managers will lease it. Our intention now is to invest a further £12 million of capex in these assets to create properties with clear net zero pathways capable of generate significant amounts of renewable energy on-site."
Savills advised Praxis on the acquisitions, CBRE advised Bank of America and JLL advised Threadneedle.
Praxis is a privately owned investor and manager of commercial real estate specialising in value-adding strategies in the UK regions. The business was established in 2009 but traces its origins back over three decades. It transacts across varying levels of the market, from smaller lots in the £5 million to £10 million range to portfolios of £200 million plus.