RBS Said to Be Selling London Office to Quebec's IvanhoeBy
Bank disposing of Premier Place as part of cost reductions
Caisse de Depot arm said to pay less than $187 million sought
Royal Bank of Scotland Group Plc has agreed to sell a London office building to an arm of Quebec’s government pension manager as the lender seeks to reduce its property portfolio and cut costs, two people with knowledge of the matter said.
Ivanhoe Cambridge Inc. will pay slightly less than the 145 million pounds ($187 million) that RBS sought for the Premier Place building when it began marketing the property in June, the people said, asking not to be identified because the information is private. RBS plans to vacate the building as part of a 750 million-pound savings plan, Chief Executive Officer Ross McEwan said on a first-quarter earnings conference call in April.
An RBS spokesman said the bank’s plan to sell Premier Place this year is part of a strategy to use the firm’s property in the most efficient and cost-effective way. He declined to comment further. Ivanhoe Cambridge declined to comment.
Banks have been cutting office space in London as they shed jobs through automation, move some back-office staff to cheaper locations and seek to bolster earnings with cost cuts as interest rates remain low. RBS vacated its 135 Bishopsgate building, near Premier Place in the City financial district, and sold another building in the Aldgate district last year after subleasing a property on London’s South Bank in 2014.
Premier Place has about 2,500 desks, and staff have begun vacating the building, which should be empty by the end of the year, a spokesman for the bank said. About 3,800 staff worked in 135 Bishopsgate.
Ivanhoe Cambridge, an arm of the Caisse de Depot et Placement du Quebec, plans to remodel the Premier Place building, which is close to London’s Gherkin skyscraper. The deal would be the first London office acquisition by the company in more than two years.