Deutsche Bank is set to create a 250,000 sq ft hub in Birmingham city centre as it moves staff out of London to reduce costs.
The bank has re-geared its lease, due to expire in February next year, at 1 Brindleyplace, taking the entire 68,500 sq ft building. It is understood to have agreed a new 15-year lease with a break at year 10.
Deutsche is also close to announcing its full occupation of the nearby 5 Brindleyplace.
Estates Gazette revealed late last year that the bank was planning to take 80,000 sq ft in the building (3 November 2012, p35). It will now occupy the entire 130,000 sq ft property. Landlords Hines and Moorfield recently undertook an £8m refurbishment of the block (pictured) following the expiry of a lease to BT.
The bank will also retain its 46,000 sq ft of offices at Baskerville House, creating a circa 250,000 sq ft hub in Birmingham city centre and making it one of the city’s largest private sector occupiers.
Sources said Deutsche needed the extra space as it was looking to move more staff to the city from London as part of a global cost-cutting review.
Deutsche has had a presence in Birmingham since 2008, but has seen employee numbers swell from 30 in 2006 to 1,300 today. It is also moving front-of-office workers from London to the region as part of a “near-shoring” jobs trend.
Rents in Birmingham are also significantly cheaper than London, with 5 Brindleyplace quoting £27 per sq ft. Average rents in the City are around £55 per sq ft.
The re-gear at 1 Brindleyplace has led landlord British Airways Pension Fund to launch a sale of the building. It is expected to be formally brought to market through GBR Phoenix Beard in the next two weeks at an asking price of £29m – a 6.5% yield.
Jones Lang LaSalle advises Deutsche Bank; GVA is acting for Hines and Moorfield.
All parties declined to comment.
lisa.pilkington@estatesgazette.com
