German open-ended fund manager Deka is lining up the purchase of a £220m South Bank office block, as it continues a highly acquisitive run.
It has entered exclusive talks with Royal London Asset Management and Malory Clifford’s Blackfriars Investments to buy the iconic 300,000 sq ft Palestra development, SE1.
DTZ formally launched the sale process for the Will Alsop-designed freehold asset at 197 Blackfriars Road in June, seeking £220m, reflecting a 5.2% yield.
The building is let to Transport for London for a further 13.5 years, producing an annual rent of £12m a year, equating to £39 per sq ft.
Sitting adjacent to Southwark tube station, the building provides 30,000 sq ft floorplates.
Deka has been one of the most active investors in the central London market this year, buying and selling several high-profile assets.
EG revealed last week that it had emerged as the frontrunner to secure the £225m 5 Aldermanbury Square, EC2.
Earlier this year it bought the Guardian and Observer newspapers’ headquarters in Kings Cross, N1, for £235m and 1 Southampton Row, WC1, for £110m in the first half.
More recently, it has looked to cash in on West End demand by selling the £115m Chelsea block, 60 Sloane Avenue, SW3, and the £150m Lumina House at 333 Oxford Street, W1.
It has seen a major surge in fund inflows this year, more than tripling the €205m capital net capital inflows of Q1 2011 with €660m in the same period this year.
Savills advised Deka; DTZ advised the seller.
All parties declined to comment.
jack.sidders@estatesgazette.com
