Deutsche Bank’s proposed lease of space at Broadgate in the City of London has fallen victim to the credit crunch.
The German Bank, which earlier this month had to write off €2.2bn (£1.5bn) because of the US subprime mortgage crisis, was under offer at the building at 175 Bishopsgate at a rent rumoured to be in the ‘low 50s’. It was said to be undertaking the deal to fulfil overflow space needs.
The building, which is the European Bank for Reconstruction and Development headquarters, was sold in May by British Land to German fund manager KanAm Grund for £386.5m a net initial yield of 4.8%. .
It is thought that Deutsche’s ongoing review of its property strategy in London continues and that it has not shelved any other of its requirements for office space.
Deutsche had to reassure investors this month that it would have a net profit of more than €1.4bn (£971m) in the third quarter after fears that it would record a loss because of the knock-on impact of the credit crunch. Swiss bank UBS has recorded its first quarterly loss in nine years and has said it would cut 1,500 jobs.
Jones Lang LaSalle acts for Deutsche; Drivers Jonas is letting agent for KanAm. All parties were unavailable for comment.
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