Deutsche Bank Unit Near $517 Million London Building DealBy and
Deutsche Bank AG’s asset-management unit agreed to buy two office buildings near London Bridge railway station for about 400 million pounds ($517 million), according to two people with knowledge of the plan.
Deutsche Asset Management will buy the Bankside 2 & 3 properties near the Tate Modern art gallery from M&G Investments, the people said, asking not be identified as the deal isn’t public. The buildings are leased to tenants including Royal Bank of Scotland Group Plc. Spokesmen for M&G, a unit of Prudential Plc, and Deutsche Bank declined to comment.
Continental European investors who shunned London’s commercial property in the run-up to the Brexit referendum are flocking back as the weak pound cuts prices. Investors from the region spent 1.7 billion pounds on the capital’s offices, shops and warehouses this year through April 18, compared to 824 million pounds in the same period in 2016, according to broker Savills Plc.
The surge in demand comes despite a forecast by the Deutsche Bank unit, which acquires property on behalf of clients, that central London office values will probably fall as much as 20 percent this year as the economy slows, uncertainty continues about the terms of the U.K.’s exit from Europe and property taxes for tenants increase.
Brexit is an “opportunity” to invest in the U.K. because London yields are at four percent compared with about three percent in core continental European markets, Pierre Cherki, head of alternative investments at Deutsche Asset Management, said in a March interview.