Leveraging history with a high-quality asset to secure sale above guide price
JLL‘s multidisciplinary team tapped deep insights across market sectors to set a starting price that fueled investor interest, significantly outperforming expectations
10,000 sq ft terrace
Asset manager firm DWS was the sole owner of 2-3 Bankside, a high-performing office building in London’s South Bank that commanded robust rents thanks to superior amenities including a 10,000 sq ft terrace. The building architecture had excellent potential for renovation to meet net zero carbon targets with some investment, while the fact that it was let to a single tenant, Omnicom, bearing the full costs of repair and insurance, ensured its premium quality.
Like many firms, Omnicom has sustainability targets to meet in the coming years, with an opportunity to upgrade its offices at 2-3 Bankside at the end of its lease in 2028.
It was a robust candidate for a potential joint venture that could inject the investment needed to bring the building to high sustainability standards.
DWS sought to recapitalise the asset and then reinvest in student living and warehousing and logistics in UK and Europe. To access the best opportunities for selling 2-3 Bankside, DWS requested marketing pitches from JLL, which had secured the acquisition of the building in the first place, as well as two competitors.
JLL set up a multidisciplinary team to analyse the current and projected value of the asset.
Our valuation specialists undertook capital gains analysis while the financing team investigated transaction possibilities. Our research team performed an extensive submarket resilience study that identified the South Bank as one of London’s top three markets, forming the basis of a narrative about the strong investment opportunity inherent in the 2-3 Bankside asset.
Our sustainability team also produced a report on the net zero potential of the building to support our marketing strategy. As a single JLL team, we worked closely with JLL’s City office agency teams that had supported us with advisory on 2-3 Bankside over the past five years.
Armed with multi-faceted insights, we prepared materials to present the asset to the market in a proactive campaign to generate investor interest.
JLL’s historic experience with DWS and understanding of its interest and objectives meant our marketing strategy strongly outperformed that of our competitors.
Where our competitors had pitched a much more aggressive starting price, our insight into the asset coupled with deep knowledge of the local market and its current and planned development pipeline enabled us to set terms that fuelled investor interest, which our client appreciated.
The strategy to quote a sensible start price generated significant bidder tension, culminating in a sale price £30 million over the market guide price of £410 million and outstripping DWS’s expectations.
With the building’s original tenant, Omnicom, ending up as the buyer, 2-3 Bankside is in good hands for the sustainable renovations that will ensure its value long into the future, delivering excellent returns to both parties in the transaction.