Long-Delayed City of London Sale Shows Office Deals Return

(Bloomberg) -- DWS Group has agreed to sell a City of London office building after a protracted sales process that was initially thwarted by the pandemic.

The German asset manager majority-owned by Deutsche Bank AG has agreed terms to sell Capital House at 85 King William Street to a fund managed by Barings, according to people with knowledge of the arrangement. Barings will pay about 130 million pounds ($179 million) up front, with further top-up payments due once vacant space in the building is leased, said the people, who asked not to be identified as the talks are private.

Representatives for DWS and Barings declined to comment.

It caps a stop-start process that started last October as confidence began returning to the City's real estate market, only to be squashed by the spread of coronavirus. DWS halted talks earlier this year as bids from investors nervous about the future of office buildings fell short of its expectations, Bloomberg news reported in February.

London's real estate owners are preparing a series of trophy office buildings for sale in anticipation that the remaining restrictions designed to limit the spread of the virus will be lifted this month. Properties including the London headquarters of UBS Group AG are among those expected to be sold in the second half of this year as more international investors are able to visit the city to inspect potential properties.

Hoi Hup Realty Pte has appointed brokers Savills Plc and Knight Frank to sell 1 Golden Lane, another office building recently vacated by UBS, according to Savills director Felix Rabeneck. The building is being marketed at developers as an opportunity to refurbish the space at a time when few other projects are under construction.

“People are waking up to the realization that the office is not dead,” Rabeneck said. “And there is going to be a dearth of available space as the development pipeline is constrained.”