Deutsche Asset Management has exchanged contracts to buy Omnicom’s South Bank HQ at 2&3 Bankside, SE1, for around £315m – a net initial yield of 5%.
Deutsche AM is buying the 453,904 sq ft building from M&G Real Estate for its open-ended real estate fund Grundbesitz Europa.
It will pay around £315m 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.
The second payment would bring the total price to around £385m.
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 was instructed by M&G Real Estate to sell the campus in January for circa £400m. JLL is advising Deutsche AM.
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