(Bloomberg) -- Malaysian construction firm Gamuda Bhd. has bought Deutsche Bank AG's soon-to-be-vacated London office for £257 million ($315 million) in one of the City's biggest property deals this year.
Gamuda partnered with UK private equity firm Castleforge for the purchase of Winchester House, the company said in a statement Monday. The buyers plan to refurbish the premises into a sustainable office for global financial institutions, legal firms and tech corporations, they said.
Deutsche Bank's current lease is set to expire in April 2024, with the German lender due to move to a new headquarters above Moorgate in the City of London this year.
“Winchester House is a landmark acquisition,” said Michael Kovacs, founding partner of Castleforge. “We will see this space transformed to trailblaze a new class of amenity rich and sustainable offices in the area.”
Britain's commercial real estate market has been in flux lately as rising interest rates reduce the spread between prime property yields and government bonds. But new buildings with top environmental credentials and long index-linked leases have outperformed other property types as investors seek a sanctuary from runaway inflation.
The new London headquarters Deutsche Bank is soon moving into was sold for £809 million last year — a sharp discount to its initial valuation. Land Securities Group Plc exchanged contracts for the sale of the office development at a 9% discount to the valuation in March 2022, promising to yield £145 million of development profit.
Deutsche Bank signed a 25-year lease for the new 568,500-square-foot property in 2017 and will pay rent of £38 million a year. Landsec has yet to finish the development, which was delayed by the coronavirus pandemic as contractors reduced the number of staff on site to enable social distancing.
--With assistance from .
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