HSBC’s Canary Wharf office space has been bought by a South Korean investor, making it the third time the block is changing hands in three years. An earlier deal with Spanish company Metrovacesa in 2007 did not turn out very successful as the economic downturn affected the fortunes of the buyer, who failed to meet its commitments. HSBC thus repurchased the building in 2008, a year after the sale.
The latest deal has been completed recently with HSBC signing off on a leaseback arrangement with Korea’s National Pension Service. The Korean property group had already shown keen interest in acquiring this property back in September itself. The deal has totalled a sum of £772.5m, and HSBC has handed over the ownership papers of the Canary Wharf headquarters to the investor. This is the latest episode in a series of deals in the offices to rent London market that are being undertaken by foreigners.
A lot of foreign interest is being witnessed in the office space markets in the UK, as there are predictions about a boom in this sector in the near future. The £350m gain from the deal will be seen in HSBC’s books by year-end.
The building has housed the offices of HSBC since 2002 and it will continue to do so under the terms of the leaseback agreement. An annual rental of £45m has been agreed upon by both parties payable for the next 17 years by HSBC in return for tenancy of the premises.
While The Korean Investor’s portfolio has gained 900% with this acquisition, HSBC clients were not too happy with the sale, as HSBC services a huge number of customers in nearby locations and the clients thought that the group would move its headquarters to a different location. However, sources within the company have hastened to assure that the group will continue to operate from the building.
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