MALAYSIAN construction firm Gamuda has bought Deutsche Bank’s soon-to-be-vacated London office for £257 million (S$419.8 million) in one of the City’s biggest property deals this year.
Gamuda partnered with UK private equity firm Castleforge for the purchase of Winchester House, the company said in a statement on Monday (Mar 27). The buyers plan to refurbish the premises into a sustainable office for global financial institutions, legal firms and tech corporations, they said.
Deutsche Bank’s current lease is set to expire in April 2024, with the German lender due to move to a new headquarters above Moorgate in the City of London this year.
“Winchester House is a landmark acquisition,” said Michael Kovacs, founding partner of Castleforge. “We will see this space transformed to trailblaze a new class of amenity rich and sustainable offices in the area.”
Britain’s commercial real estate market has been in flux lately as rising interest rates reduce the spread between prime property yields and government bonds. But new buildings with top environmental credentials and long index-linked leases have outperformed other property types as investors seek a sanctuary from runaway inflation.
The new London headquarters Deutsche Bank is soon moving into was sold for £809 million last year – a sharp discount to its initial valuation. Land Securities Group exchanged contracts for the sale of the office development at a 9 per cent discount to the valuation in March 2022, promising to yield £145 million of development profit.
Deutsche Bank signed a 25-year lease for the new 568,500-square-foot property in 2017 and will pay rent of £38 million a year. Landsec has yet to finish the development, which was delayed by the coronavirus pandemic as contractors reduced the number of staff on site to enable social distancing. BLOOMBERG
Source : Business Times
Gamuda Berhad has announced the acquisition of Winchester House London from Wessex Winchester, the current UK headquarters of Deutsche Bank AG in the United Kingdom, in partnership with Castleforge Partners Limited for RM1.39 billion.
The Proposed Acquisition is part of Gamuda Land’s Quick-Turnaround-Projects strategy, which aims to build a regional portfolio of real estate projects with a high internal rate of return (IRRs), with investment timeframes of 5 years or less. QTP is sector-agnostic and seeks to capitalise on strong demand, proprietary and off-market deals with value-add potential.
Gamuda said Winchester House London will be refurbished and upgraded into a best-in-class, top-rated environmentally sustainable ESG office space catering to global or multinational financial institutions, legal firms, and mega-tech corporations. It intends to dispose of this investment, by the 5th year or prior, after locking in strong pre-lease arrangements by quality tenant
Winchester House London’s current lease to Deutsche Bank AG as the bank’s London headquarters is due to expire in April 2024. Gamuda and Castleforge’s business plan entails:-the refurbishment of Winchester House from 8-storeys (317,000 sq ft) to 11 storeys, resulting in an additional ~200,000 sq ft of space to total approximately 500,000 sq ft.
Castleforge is a leading private real estate investor based in the UK that specialises in research-led investment themes, vertical integration, and in-house operating platforms in commercial property. Founded in 2010, Castleforge via its funds that it manages, has invested in, acquired and developed approximately £1 billion (RM5.4 billion) of assets and successfully delivered 2.4 million sq ft of office space in selected UK and European cities.
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