Deka shops for more London properties after Clarges buy

Germany’s Deka Immobilien has set its sights on buying more assets in London before the end of the year, having completed its £177m purchase of Clarges Mayfair, W1, from British Land. “We are looking further at a couple of opportunities that we may manage to execute before the end of the year,” Dimitar Dimitrov, investment manager at Deka, told EG. However, he admits that buying long-income, prime and mainly office properties in the capital this year has been anything but easy, with competition keeping pricing robust. “What we understand and what we have seen in this latest transaction for Clarges is that for these types of buildings, first you have to be very reliable, second you have to be very fast – we did this transaction in less than three weeks from signing heads of terms – and then you have to be competitive in pricing. “We’ve previously looked at other buildings where we were overbid so it looks like pricing remains where it was (for these types of assets) pre-Covid.” Rent collection for its London assets has also remained steady with little drop off, Dimitrov added. The stability of rent collection and continued faith in London’s ability to bounce back when the pandemic subsides and Brexit is done is why the firm remains steadfast in its strategy of buying core buildings in the capital. “The best space in the best locations will survive better, remain appealing and the rents should stay at the same level,” said Jörg Wagner, Deka’s head of acquisitions and sales for the UK. He expects Covid-19 and Brexit to have an impact next year but anticipates things going back to normal in two years’ time. Dimitrov added that he has seen the benefit of being back in the office. “It simply provides better collaboration and where we can definitely do more work more effectively and we’re more effective when we meet two or three times a week,” he said. He believes companies will always “need a place that they can identify themselves with and also where decisions can also be easily made”. For those tenants who decide to reduce their office space footprint, there will be others who will simply reconfigure their space to have more meeting rooms, more collaboration space and to create more fresh air instead of an area crammed full with desks, he added. Looking ahead, Deka has “loads” of capital to deploy, Wagner said. “We could really spend a lot more but we certainly are trying to move carefully and only acquire property like Clarges – of high quality. “We will try to complete the deals we are working on now and the rest of the spend will roll over into next year and start from there. We hope there will be more product for us to acquire next year. We’ll wait and see.” To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette