City of London’s £650m Gherkin put up for sale by receivers

14:53 • 29.07.14
Economy

The City of London’s Gherkin building has been put up for sale by administrators who hope to attract bids of at least £650m, the Financial Times reports.

The 41-floor tower was designed by Lord Foster for insurance company Swiss Re and opened in 2004.

But the Gherkin fell into receivership this year after debts secured against the building soared. Administrators Deloitte have appointed estate agents Savills and Deloitte Real Estate to sell the building, which is thought to have a market value of at least £650m, according to those with knowledge of the market.

The Gherkin, officially known as 30 St Mary Axe, was bought from Swiss Re in 2006 for £600m by London based investment bank Evans Randall and German real estate group IVG Immobilien.

IVG chose to denominate its share of the £400m loan used to finance the purchase in Swiss francs, without a currency hedge.

The currency has risen 56 per cent against the pound since 2007 and as a result the building breached its loan to value cap in 2009.

It has remained in breach since and in April the lending consortium of five German banks led by Bayerische Landesbank called in administrators Deloitte.

Stephen Down, head of central London investment at Savills, said the Gherkin was “a globally recognised landmark building” sitting “at the heart of London’s business core”.

London’s commercial property market has begun to boom as investors pour into the city from all over the world and the economic recovery boosts demand for office space.

Office availability is at its lowest level since 2007, with 45 per cent of space being built already let, according to figures from Deloitte Real Estate.

Mr Down said there was scope to increase rents at the Gherkin. He expected the sale to be concluded by mid-autumn.
 

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