The announcement that the Gherkin has been placed on the market is expected to ignite interest among overseas investors.
30 St Mary Axe, one of London’s most recognisable landmarks, collapsed into receivership earlier this year after the skyscraper’s owners Evans Randall and IVG failed to negotiate a restructuring deal over mounting debt.
Since April, receiver Deloitte has been attempting to find a solution to the problem and has now confirmed that the office building will be sold, attaching an asking price of £640 million.
Built in 2004, the Gherkin was originally owned by insurer Swiss Re but was sold to the current owners in 2007 in a deal worth £600 million.
£500 million of the total sum was in the form of a loan from a consortium of five banks, led by Bayerische Landesbank, and problems arising from this caused the owners to default on the loan in 2009.
This set in motion a chain of events which saw the partnership’s debts continue to grow, leading to the eventual sale announcement.
Deloitte will now begin to market the Gherkin, which contains around 505,000 sq ft of office space, with industry experts forecasting a high level of interest from all corners of the globe. In part, this is due to the fact that the 40 storey tower currently has around 20 tenants, making it a relatively safe investment in terms of rental income.
Head of central London investment at Savills, Stephen Down, believes that acquiring the Gherkin could prove to be an immensely profitable move for a number of interested parties.
He says; “This is a prestigious appointment on what is a globally recognised landmark building, which sits in the heart of London’s business core.
“The central London commercial property market has benefitted from improving market conditions over the course of the last few years.
“Not only have we witnessed a sustained appetite from international investors for assets in London but we have seen a substantial improvement in business growth and take up of office supply as the Capital’s economy continues to improve.”
Economists’ predictions that an overseas investor will become the Gherkin’s new owner seem a safe bet, as over the past five and a half years this group has accounted for 67 per cent of the overall volume of office and retail market investment in central London.
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