November 14, 2009 2:00 am
South Korea's National Pension Service will next week complete the purchase of the HSBC tower in Canary Wharf for £773m in cash - about a quarter less than it was sold for at the peak of the market in 2007.
The building was acquired by Metrovacesa, the Spanish property company, in a sale and leaseback deal for £1.1bn in 2007, but the company was then forced to sell it back to the bank for about £840m. The bank made a gain of £250m on the transaction.
The sale was pushed by the need to refinance the £810m bridging loan behind Metrovacesa's acquisition of the 45-story tower, which was the most expensive property transaction in the UK.
The Korean investment group has been in exclusive talks since September. It is acquiring the building on similar terms to Metrovacesa, although the price paid shows how far property values have dropped since their peak as well as the shorter lease. As a result of the transaction, HSBC will make a gain of £350m on its book value.
The state pension fund manager is looking for other real estate acquisitions. The deal, one of the largest property transactions this year, is seen as an opportunistic sale by the HSBC real estate team, led by Vivienne Grafton, given a rising market for prime assets in the UK. HSBC has also agreed the sale of its New York headquarters and plans to sell its Champs Elysées offices in Paris.
CB Richard Ellis is advising HSBC. All parties declined to comment.
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