Goldman Sachs Group and Korea’s National Pension Service (NPS) have agreed a deal to sell the US investment bank’s new London HQ to the South Korean public pension fund.
The deal values the building at £1.165m. This makes it the largest deal for a London commercial building this year.It is only marginally behind the £1.28bn sale of 20 Fenchurch Street (the so-called the Walkie Talkie) in 2017.
Goldman Sachs have agreed to lease back the building for 25 years, with an option to leave after 20 years.
The new building at Plumtree Court consists of 826,000 sq.ft. over 10 storeys and will be completed next year. It will become the bank’s new London home for 8,000 staff relocated from three existing buildings in the capital.
Goldman Sachs has developed the campus-style building specifically for its own requirements. Although according to the company it has the flexibility to be occupied by a single or multiple tenants. It will achieve a BREEAM rating of Excellent and incorporate a number of contemporary features including a central atrium, fitness centre, childcare facilities and on site health services.
The transaction is being conducted via LaSalle Investment Management.
Transaction is notable for two reasons:
The lengthy leaseback period tends to confirm the bank’s commitment to the UK in the long term, even in the face of an uncertain (and potentially hard) Brexit.
Richard Gnodde, vice-chairman of Goldman Sachs and chief executive of Goldman Sachs International, said in a statement: “The development of Plumtree Court and our signing of a long-term lease demonstrates our continued commitment to London and our European operations more broadly.”
The size of the investment involved underlines the interest in, and commitment to, the UK commercial market from Asian and particularly South Korean investors. The acquisition of Plumtree Court is just a part.
‘Investors from South Korea are forecast to invest £4bn by the end of 2018.’
According to Cushman and Wakefield investors from South Korea invested £1.1bn in UK commercial property in the first half of 2018, more than twice that invested in the whole of 2017, and are forecast to invest £4bn by the end of 2018.
Commenting on the deal Scott Kim, Head of Global Real Estate at National Pension Service said: “This is one of the finest office buildings in London which will be let to an exceptional tenant for 25 years. We are excited to re-enter into London market with this high quality asset which is well-aligned with our defensive strategy and will be an excellent addition to our already strong core portfolio.”