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AXA IM in advanced talks to buy Dolphin Square

George Sell Uploaded 29 June 2020 UK: AXA Investment Managers - Real Assets is in advanced talks to buy the one million square Dolphin Square apartment block in London for around £850 million.

If successful, the deal would be by far the largest ever for a single UK rented residential asset. AXA is reported to be in exclusive discussions to buy the 1930s building, which comprises 1,233 apartments.

According to a report in React News, other investors are also looking at the asset, and owner Westbrook Partners might refinance rather than sell the building.

Dolphin Square is a red-brick landmark on the north bank of the Thames close to the Houses of Parliament, with a colourful history. Former residents include then prime minister Harold Wilson, as well as Christine Keeler and Mandy Rice-Davies, the women at the centre of the Profumo affair that helped bring down the Conservative government of the early 1960s.

As well as around 850 apartments let on standard assured short-hold tenancies, there are 165 serviced apartments, and 215 tenants who have fixed rental payments of 50 per cent of market level on leases that run until 2034.

These tenants are described as "a loud and vocal minority, and almost all protested against a major redevelopment proposed by Westbrook in 2017 that would have seen it invest £400 million in the asset".

This would create 275 new apartments, taking the total to 1,395, principally through the addition of another storey on top of the existing structure and also by splitting larger flats down into smaller units. More serviced apartments and new gym facilities and cafés would also have been added. Westminster councillors turned the application down even though planning officers recommended it for approval. Westbrook has launched an appeal against the decision.

AXA is a major investor in rented residential assets in Ireland, Spain and Germany, but this would be its first significant deal in the sector in the UK.

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