Deka to purchase South Bank offices for £220m

Deka, the German open-ended fund manager, has signalled its intentions to invest £220m in the Palestra office block on London’s South Bank as part of an aggressive purchasing strategy.

The firm has begun talks with current owners Royal London Asset Management and Malory Clifford’s Blackfriars Investments, to purchase the landmark 300,000 sq ft property, which sits within the capital’s exclusive SE1 postcode.

Property advisers DTZ initiated the sale process in June this year, with an asking price of £220m, reflecting a yield of 5.2%.

The property – at 197 Blackfriars Road – was designed by Will Alsop and is currently leased by Transport for London, whose contract is set to run for a further 13.5 years at £12m (or £39 per sq ft) per annum.

The offices, which are housed behind a RIBA award winning abstract glass façade, sit adjacent to Southwark tube station, with floorplates of 30,000 sq ft.

The move comes as part of an anomalously busy year for Deka, who have bought and sold a number of high profile assets since the start of 2012.

In the first half of the year, the firm purchased both the Guardian newspapers’ headquarters in Kings Cross, and offices at 1 Southampton Row, for £235m and £110m respectively.

Last week, property publication Estates Gazette revealed Deka as the most likely candidate to secure 5 Aldermanbury Square in London’s EC2 for an estimated £225m.

The firm has put prime assets, including Lumina House at 333 Oxford Street and offices at 60 Sloane Square, up for sale for £150m and £115m respectively.

Deka has seen noticeable increase in its fund inflows during 2012, with net capital inflows of €660m in Q1 2012 more than three times higher than the €205 m registered in the same period last year.

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