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Perhaps the most iconic building in the City of London has been put up for sale on the open market after it went into receivership earlier in the year. 30 St. Mary’s Axe, otherwise known as the Gherkin has struggled over the last five years due to adverse interest rates and currency movements affecting its complex multicurrency capital structure.
The building was purchased by Evans Randall and IVG from insurer Swiss Re at the start of 2007 for £600 million, using a loan of £396 million from a consortium of five banks. £600 million was a record price for a property in the City at that time, which many considered overpriced. However the issues with its financing (largely due to Swiss Franc becoming so strong against the Great British Pound) meant huge amounts of debt built up.
The Gherkins lenders appointed Deloitte as receiver of the 505,000 sq. ft. building following issues with its current owners, and with the help of Savills they are currently preparing to market the iconic building worldwide. London has always had a huge amount of foreign investment and this is a rare opportunity for foreign investors to have a piece of the iconic building.
Rhodri Mason from Morgan Pryce says, “The Gherkin is fully let to a variety of quality tenants who are paying an average of £55psf and is sure there are many interesting asset management opportunities which a future owner could capitalise on.” Savills and Deloitte Real Estate are expecting the Gherkin to achieve a sale price of over £640 million.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.