UK studio Caruso St John has created Gagosian's third and largest gallery in London, featuring dark oak flooring and a glass ceiling, which opened ahead of this week's Frieze art fair (+ slideshow).

The new gallery – the seventh space Caruso St John has designed for the global art dealership – is located on Grosvenor Hill in Mayfair, on what was previously a complete city block occupied by a Brutalist 1960s development.

The development consisted of a residential tower and a two-storey office building with parking underneath. Despite appearing like a new freestanding building, the 180-square-metre gallery is built using the skeleton of the office building.

"What the project did was to demolish the structure of the office building back to the perimeter columns and some of the original roof beams, took out the floor, stiffened the structure to make this space," architect Peter St John told Dezeen. "So essentially it's the same shape as the building that used to be here, outside, and inside is totally different."

Caruso St John's interior features two double-height gallery spaces and two smaller connecting areas, with large openings in between. The gallery was designed to give Gagosian the flexibility to show a range of different works.

"We needed more flexibility to make lots of different exhibitions," gallery director Gary Waterston told Dezeen. "We tried to create a space that was different, that wasn't just concrete floor with exposed beams and fluorescent lighting, but something much more of this neighbourhood."

Caruso St John chose end-grain dark oak block for the floor of the gallery. The blocks used are very large in scale, so the growth rings of the wood are sparser and more distinct.

While giving the impression of daylight, the glass ceiling in the gallery spaces contains artificial low light, which evenly illuminates the space using relatively little energy and without generating heat.

"There's a cavity behind the glass the depth of the steel structure in which there's an array of very closely spaced LED lights, which are both warm and cool bulbs," said St John. "We can vary the colour of the light to match the colour of the light of the sky. It can actually relate to whether there is a cloud over the building, which is amazing."

A few almost-full-height windows bring more daylight into the white gallery spaces, while a black steel-framed door marks the entrance.

"Within the obvious confines of designing flexible spaces, you try to avoid the banal details and abrupt experience of art that is the normal way in a commercial gallery," St John told Dezeen. "The new Mayfair gallery is more refined, it has a beautiful dark timber floor and a glass ceiling, like a museum. It's not like a loft or an industrial building."

The back-of-house space is located through a hidden door and up a staircase. It has a larger floor space than the galleries themselves and contains offices, a wooden library, an art store and viewing spaces to show clients artworks.

The exterior of the building was completed by London practice TateHindle for the Grosvenor Estate – who have leased the building to Gagosian for 20 years. The gallery is clad in handmade light-grey Roman bricks, which are longer and flatter than standard bricks.

Gagosian Grosevnor Hill is part of a cultural revival of the area. Recent additions include the headquarters of Phillips auction house, Sadie Coles gallery and fashion designer Hussein Chalayan's first shop.

Caruso St John has been working on Grosvenor Hill for three years. It's completion coincides with the London gallery they designed for British artist Damien Hirst's private collection, in a row of converted and extended theatre warehouses in Vauxhall.

The practice has designed both Gagosian's other galleries in London – Britannia Street and Davies Street – as well as outposts in Hong Kong, Rome and Paris.

"[Gagosian] trust us, that is the important thing," said St John. "There's always uncertainty in running a practice, so we have been lucky to have them as repeat clients. They are the only ones!"

20 Grovesnor Hill has opened with an exhibition of works by American artist Cy Twombly, including two of his large-scale Bacchus paintings that have never been shown in public. Cy Twombly is open until 12 December 2015.

Frieze London takes place in Regent's Park from 14 to 17 October.