
Winchester House will be renovated to an 11-storey Grade A office block. (Source: David Walker Architects)
A Malaysian conglomerate is betting it can make a quick ringgit in a depressed London office market with Gamuda Berhad announcing on Monday that it has teamed up with UK investment manager Castleforge Partners to acquire Deutsche Bank’s UK headquarters from China’s CIC.
Gamuda and Castleforge have agreed to buy Winchester House in the City of London from China’s sovereign wealth fund for £257 million ($316.4 million), despite the German banking giant planning to exit the 317,000 square foot (29,450 square metre) building in just over one year’s time.
“Gamuda and Castleforge are confident that the refurbished Winchester House will appeal to multi-national corporates seeking high-quality, sustainable office spaces,” the company said, while citing an upgrade and expansion plan as a way to boost the value of the 1998-vintage property.
CIC teamed up with Invesco to purchase the building at 75 London Wall in the UK’s traditional financial hub for £245 million (then $389 million) in 2012. In US dollar terms the mainland sovereign fund saw its first direct investment in the UK real estate market lose nearly 19 percent of its value in just over 10 years.
Upgrading for Value
Gamuda, which has a pair or residential projects in the UK along with housing developments in Australia, Vietnam and Singapore as well as in Malaysia, is counting on sustainability-centred improvements and a planned expansion of the office asset to attract tenants to what is currently considered a grade B property.

Gamuda founder and managing director Lin Yun Ling
“With the strong demand for top-class ESG buildings, coupled with the acute lack of supply, Gamuda is expected to double its equity investment from this asset upon disposal within 5-years, and thus demonstrate strong returns on investment and maximise shareholder value,” the company said in its Monday disclosure.
The joint venture, in which Gamuda has a 75 percent stake while Castleforge holds the remaining 25 percent, is paying roughly £809 per square foot of Winchester House’s existing floor area. The total consideration, which will be financed through a mix of cash and UK-based debt backed by collateral, matches the asset’s current market value.
The partners plan to expand the eight-storey property to 11 floors, which will add 200,000 square feet of floor space – a nearly 60 percent expansion. The joint venture also has a scheme to make improvements in efficiency that will qualify the future grade A building for an “Outstanding” rating under the UK’s BREEAM standards for sustainable real estate.
Gamuda explained that the acquisition, which is expected to close in May, is part of its “Quick-Turnaraound Projects” strategy which aims to build a portfolio of value-add properties with a target internal rate of return of at least 20 percent within a holding period of five years or less.
Ciarán Londra, a partner at law firm Bryan Cave Leighton Paisner (BCLP) in Singapore who advises Asian investors on overseas property investments, noted that Gamuda’s plans to upgrade Winchester House align with the UK government tightening its Energy Performance Certification regime, which will require commercial buildings without residential components to meet higher efficiency standards in 2027 with still higher targets kicking in for 2030.
“Gamuda is timing this to complete its development at what they believe will be an optimum time to bring this asset back to market and realise their profit,” Londra said.
Strong Exit Eyed Post-Facelift
Once the upgrades are complete, Gamuda expects it can secure strong pre-lease commitments from global corporates in time for its five-year exit plan.
“We expect a resultant strong exit value yielding a commensurately high return on our equity investment” Gamuda said. The company did not provide details of capital expenditures on the planned improvements or leasing commitments which might provide the revenues necessary to reach its financial targets. As listed on the Gamuda website, the company’s portfolio does not show experience with office projects in the UK or in the other markets where it is active.
London’s Property Week reported that CIC was exploring a sale of the property in March last year with a target price of from £275 million to £300 million, with demand for London office space having slid in the second half of 2022.
“The leasing activity slowed for the second consecutive quarter, as the challenging economy started to impact on business sentiment,” JLL said in its most recent report on the central London office market. “Quarterly take up reached just over 2.1 million square feet, which was 20 percent below the previous quarter and half a million square feet below the ten-year average of 2.6 million square feet.
Office rents in the City of London have stayed flat at £72.50 per square foot over the past six quarters, the property consultancy said. JLL predicts that prime rents in the City will grow at an average of 3.3 percent annually over the next five years, while cautioning that “expectations have been scaled back in the short term.”
While the UK commercial property market remains relatively quiet, BCLP’s Londra said he is expecting more Asian investors to snap up properties as assets reprice.
“Foreign investors, especially those from Asia, know that the UK is offering a perfect opportunity right now for them to acquire quality assets at prices not seen in the last 10 and more years,” he said in response to Mingtiandi’s queries on Tuesday.
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