KPMG has instructed agents to sell its Canary Wharf HQ for more than £400m on a sale and leaseback basis.
JLL has been appointed to sell the freehold of the 434,261 sq ft building at 15 Canada Square, E14.
KPMG will agree a 25-year lease for the entire building with inflation matching CPI-linked reviews every five years. It will pay a rent of £18.13m, equating to around £42 per sq ft.
Philip Davidson, managing partner at KPMG, said: “We are seeing strong demand from investors for prime London assets and we want to capitalise on this rising market.
“Ownership of property is not core to our business and this move reflects our wider strategy: we lease buildings in 22 locations across the UK, keeping our capital free to invest in our business and facilities. As a firm we are making considerable investments developing technologies to provide new services and solutions to our clients, while enhancing traditional processes like audit. This transaction will accelerate that ambition.”
KPMG is the latest in a series of owner-occupiers seeking to capitalise on the investment market with a sale and leaseback deal for their London HQ. Lloyds Banking Group has instructed CBRE to market a £150m sale and leaseback opportunity for its City offices at 25 Gresham Street, EC2. Anglo American has appointed BNP Paribas Real Estate to relaunch the sale of the former De Beers HQ at 17 Charterhouse Street, EC1, with the mining giant committing to a 25-year lease.
Andrew Hawkins, international director and head of the City capital markets at JLL, said: “London remains a critical hub for global business and foreign investment. The city’s strengths are underpinned by business friendly regulation, a robust legal system and a transparent investment environment, making it an attractive place for domestic and international investors alike.
“Weaker sterling has added further weight to a strengthening property market, shown by an increase of 40% in deal turnover in Central London during the last six months, compared to the same period in 2016. We expect to receive a high level of interest from both domestic and international investors, keen to secure a long term, index linked income secured against a flagship asset in one of London’s most prominent business locations.”
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