Omnicom to buy its European HQ for £440m
Omnicom is in talks to buy its European headquarters at 2&3 Bankside, SE1, for £440m, in what could be one of London’s biggest office deals of the year.
The US advertising giant is understood to have gone under offer on the 415,000 sq ft site earlier this month, after a highly competitive bidding process which pushed the value up from an initial £410m asking price.
Omnicom is on course to beat parties including Greycoat, Link REIT and Spear Street Capital to the sale, which is being managed by agents from JLL.
Omnicom is in talks to buy its European headquarters at 2&3 Bankside, SE1, for £440m, in what could be one of London’s biggest office deals of the year.
The US advertising giant is understood to have gone under offer on the 415,000 sq ft site earlier this month, after a highly competitive bidding process which pushed the value up from an initial £410m asking price.
Omnicom is on course to beat parties including Greycoat, Link REIT and Spear Street Capital to the sale, which is being managed by agents from JLL.
Developed in 2007 by Landsec, 2&3 Bankside is made up of two office buildings just south of the Tate Modern, both comprising a ground floor, basement and nine upper storeys.
Deutsche Bank bought the leasehold for £315m in 2017 from M&G Real Estate, before Deutsche spun out its asset management business via an initial public offering in 2018 to form DWS.
The buildings contains a combined 382,000 sq ft of office space, which is let to NatWest until 2027. However, the bank sublet the space to Omnicom in 2014. There is also 34,000 sq ft of retail accommodation across 10 units.
The freehold is held by the City of London Corporation. The total net income from rent is £20.2m a year, after deducting the head rent of just over £1m.
DWS will be looking to deploy fresh capital into the office market following the sale, amid a period of recycling funds from recent deals.
It also sold off City office Capital House, EC4, to Barings for £130.5m earlier this summer, and last month completed a deal to buy 13-17 Fitzroy Street for £92m from flex operator Workspace Group.
The sale comes at a time when demand for prime central London office stock is still outstripping supply, with many landlords having held fire on launching sales until the autumn and winter.
However, the dearth of supply has meant that, for buildings such as 2&3 Bankside, hot competition among bidders has pushed the value far above the initial asking price.
Central London has seen a handful of £500m-plus office transactions this year, including Brookfield’s £635m deal to buy Plantation Place on Fenchurch Street, EC3, which had been on hold for more than a year through the pandemic.
Other major investment deals in 2021 include German investor Union’s £500m purchase of BT’s future headquarters at One Braham in Aldgate, E1, as well as the delayed £600m sale of Landsec’s Petty France office building in Westminster, SW1, which houses the Ministry of Justice.
JLL, DWS and Omnicom declined to comment.
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