Redeveloping Bank Offices Is A Big Play In London Right Now
As London, the City in particular, moves away from a reliance on financial services businesses and toward the tech sector, redeveloping the offices of banks is becoming a big play for investors, from fund managers to private equity firms, REITs to Asian billionaires.
CBRE Global Investors is the latest investor to join the trend. It has paid Royal Bank of Scotland around £183M for its 273K CBRE Global Investors is working in a joint venture with Arax Partners to refurbish the building before re-letting it. Cushman & Wakefield advised RBS on the sale.
CBRE GI will be looking to mirror the success of Morgan Stanley in a similar deal with RBS. In 2017 Morgan Stanley bought the vacant 205K SF Premier Place from RBS for £145M. It quickly leased the space to trading firm Jane Street and asset manager Gartner at rents of £60/SF, and the building is likely worth more than £250M today.
Elsewhere, REIT British Land is in the process of re-leasing 1M SF vacated by RBS and UBS at its Broadgate scheme in the City. Japanese bank Sumitomo Mitsui Banking Corp. has taken 160K SF of that space at 100 Liverpool St. But at 135 Bishopsgate, previously occupied by RBS, a different type of occupier is coming to the City: Food hall Eataly has taken 42K SF and advertising agency McCann is taking 148K SF of office space.
In Canary Wharf, Savills has been appointed to sell 17 Columbus Courtyard after owner HNA defaulted on a bank loan secured against the building. The office is leased to Credit Suisse until 2024, but the bank has already decided to vacate the 195K SF building.
Hong Kong billionaire Joseph Lau has appointed CORE to redevelop River Court, a 430K SF office occupied by Goldman Sachs in Midtown where the bank will vacate the building this year and stop paying rent in 2021.
The neighbouring 370K SF Peterborough Court has a lease running out in 2021 with vacancy in 2019. It is owned by former emir of Qatar Sheikh Hamad bin Khalifa bin Hamad bin Abdullah bin Jassim bin Mohammed Al Thani and former Prime Minister Sheikh Hamad bin Jassim bin Jaber bin Mohammed bin Thani Al Thani, better known as HBJ. While an appointment has been expected there for more than a year, no developer has yet been appointed to oversee a refurbishment.