LONDON—Cornerstone Real Estate Advisers has purchased 40 Gracechurch Street, a Grade A office building in Central London, for $144 million (£94M) on behalf of a new separate account client. 

The property, which was developed in 2010 by the vendor, Arab Investments, comprises 122,850 square feet of class A office space across eight floors, as well as a ground level restaurant.

This transaction is the first acquisition on behalf of a client who has given Cornerstone a mandate to invest in Central London with a particular focus on office properties which offer a value opportunity.

“This is a fantastic first acquisition for our new Central London initiative and is indicative of the kind of value add proposition we are targeting for our client in conjunction with some rather more core investments in the hot spots we have identified across the capital,” said Nick Pink, chief investment officer Europe.

The asset is currently 42% leased with five vacant floors, three of which have terraces. This provides an opportunity to capitalize on the improving tenant deman in the city, at a point when grade A vacancy is falling below its long-term equilibrium level.

Darren Hutchinson, director of fund management at Cornerstone Europe, added: “To secure this property is testament to Cornerstone's ability to source high quality investments on behalf of our clients.  We are excited by this opportunity to take advantage of the current increase in occupier demand in the City.  Tenant demand in the City has notably improved this year and we are confident that we will be able to position the building to enhance occupancy in the near term, particularly given the asset's prime location and Grade A quality.”

Cornerstone was advised by GM Real Estate and Hanlon Bennett. Savills advised the vendor. 

With more than $40 billion assets under management as of March 31, Cornerstone is one of the largest global real estate investment managers.