Mahir Vachani, Rishi Khurana and Rohan Jhaveri think central London office has talked itself downwards. And they’re betting £500M that they’re right and can disrupt the market by moving faster than rivals to buy value-add assets.

The trio formally launched BPS Purestone last month following the acquisition of office asset 85 Tottenham Court Road from Derwent London for £32.6M a month earlier. The deal was backed by private equity joint venture partner Revcap, with senior lending provided by Cynergy Bank.

“How much capital we are looking to deploy is dependent upon the opportunities that occur within the next year,” BPS Purestone Joint Director Vachani said.

“It is possible that we reach £500M GDV before H2 2029, if the right assets come to market.”

The platform is drawn from two existing firms: central London property company BPS, which represents capital on behalf of several family offices, including its own, and pan-European office developer and investor Purestone Capital. 

The platform has launched with £160M in gross development value of developed or pipeline projects and is aiming at £500M GDV within three years.

The company points to the 43K SF 80-85 Tottenham Court Road as a blueprint for its approach, with a retrofit and building upgrade planned to rejuvenate the 30-year-old asset and joint agents Cushman & Wakefield and Comptons appointed.

“BPS Purestone’s strength derives from our ability to quickly build a funding model for individual transactions as they arise at a much faster rate than our peers,” Vachani said. “This can be seen from our recent purchase of 85TCR, and it is a model we would like to mirror.”

The capital stack at 85TCR combines founder equity, family office capital, private equity and bank lending, and the directors maintain that this diversity provides it with a significant liquidity advantage over its institutional peers.

“Part of our mission to become a market disruptor, we are keen to utilise this stack to enable rapid deployment of capital, while reducing transaction friction,” BPS Purestone Joint Director Khurana said.

The firm’s relationships with different funding partners allow it to explore a greater range of asset management and income-generating strategies for value-add opportunities, Khurana added. This includes structural alterations, such as adding storeys or internal retrofits, as well as change-of-use plans, which may be excluded from the lower risk profile of institutional investors.

Compared with the current market standard, where development managers will normally co-invest 1%-10% in individual transactions, BPS Purestone will always aim to have significant equity of over 25% invested in each asset or JV. 

In its London focus, the directors stress that they see evidence of “enduring performance,” notably through assets in close proximity to public transport hubs — particularly those near the Elizabeth Line — and with established market fundamentals. 

“However, we’re aware that many of these assets have not received the investment required to meet contemporary leasing requirements,” Khurana said.

Occupier demand, particularly from the growing artificial intelligence and IT sectors, has outpaced supply of updated assets in central London. And feedback from both agents and occupiers indicates that larger potential tenants are crowding out startup firms or newer entrants within a constrained market, he added.

This is particularly the case for amenity-rich, hotel-style, Grade A offices, which are now in high demand from occupiers.

As a result, BPS Purestone’s near-term investment focus is expected to remain on the office sector, while it continues to assess opportunities in the residential market, including distressed assets where pricing is attractive, although this is not currently a strategic priority.

International capital has been attracted back to the capital by opportunities after what the directors describe as “prolonged negative sentiment towards value-add offices,” which they believe has significantly devalued prices across both central London and the wider south east.

“While some of these assets, particularly those in business parks or regional towns, may devalue further, we are advising investors that Zone 1 and 2 assets may soon see a sharp recovery — and that an entrance into the market may generate significant ROI in the near term,” Vachani said.

He also pointed to the stability of the London market — in particular, office or mixed-use schemes backed by strong rental covenants — with APAC capital continuing to see London as a safe haven.

“We are aware of a trend to diversify investment away from Asian cities, such as Hong Kong, which have recently experienced significant price fluctuations,” Vachani said.

“For MENA partners, recent geopolitical events have disrupted the overheated UAE market and its reputation as a secure destination for inward investment. Many investors are now looking to broaden their market allocations, and London is a major beneficiary.”