Goldman Sachs said on Wednesday it had sold its new, unfinished European headquarters in London to South Korea’s National Pension Service for 1.17 billion pounds before moving staff to the site next year.
As part of the agreement, the Wall Street investment bank will lease the building, which is still under construction and not due to be occupied by the bank until 2019, for an initial period of 25 years.
The bank announced it would build the 1.1 million square foot (102,000 square metre) office, called Plumtree Court, in February 2017, even as it and other global banks grappled with the risks of Brexit.
“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,” said Richard Gnodde, vice chairman of Goldman Sachs and CEO of Goldman Sachs International, in a statement.
The bank said the sale and leaseback of Plumtree Court is part of its long-term global real estate strategy, enabling it to capitalise on the value created via the development while securing a long-term occupation of the site.
It sold and leased back its current headquarters, also in London, in 2005. British lender Lloyds Banking Group also recently did the same with its London headquarters, selling it to a Chinese investor.
The sharp drop in the pound after the Brexit vote lured foreign investors into the British real-estate market.
Goldman Sachs’ lease agreement includes a break option after 20 years and the possibility for the bank to extend this beyond the initial term.
Scott Kim, the head of global real estate at South Korea’s National Pension Service, said Plumtree Court was one of the “finest office buildings in London”.
“We are excited to re-enter into the London market with this high-quality asset,” he said. (Reuters)