Deutsche AM confirms £310m 2&3 Bankside buy

Deutsche Asset Management has confirmed its acquisition of Omnicom’s South Bank HQ at 2&3 Bankside, SE1, for around £310m – a net initial yield of circa 5%. Deutsche AM acquired the 453,904 sq ft building from M&G Real Estate for its open-ended German real estate fund. It will pay around £310m in a first tranche payment with a second tranche payment linked to rental uplift from Omnicom’s rent review in September, expected to be between £60m and £70m. James Petit, head of real estate, UK and Ireland for Deutsche AM, said: “London remains one of Europe’s most attractive markets for real estate investment despite Brexit. Bankside are two quality buildings in an attractive, emerging location. The regeneration of this area is making it one of London’s fastest growing submarkets and an increasing magnet for tenants.” The office space is fully let to Omnicom on two separate leases, both expiring in September 2027. It was initially prelet to Royal Bank of Scotland on two 20-year leases at £40.50 per sq ft with five-yearly upwards-only rent reviews. The bank later sublet the office space to Omnicom for about £45 per sq ft in 2014. Cushman & Wakefield and Hogan Lovells advised M&G Real Estate. JLL advised Deutsche AM. To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette