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Blackstone’s £300m bid to buy London’s ‘Tin of Ham’ skyscraper has failed, the latest sign that big-ticket office sales have stalled due to disagreements over the building’s value. It became a sign.
US Group, the world’s biggest commercial property investor, was in exclusive talks to acquire the building with an offer of just over £300m, according to people familiar with the process. However, the seller, Nuveen, was unwilling to accept an offer below the asking price of £322 million.
The breakdown in negotiations, first reported by Green Street News, halted what would have been London’s biggest office deal in two years.
Still, Blackstone’s willingness to bid on large, top-quality office buildings is a positive sign for the office market after two years of hardship. According to MSCI, investment in London offices in the first nine months of this year was the lowest since 2003.
However, the price offered by the US group is below what many owners are still valuing their towers for. One of the people said Nuveen was considering improving its asking price.
The impasse between the two investors over price suggests neither buyers nor sellers are ready to compromise enough to break the deal negotiation drought.
“There is a gap in price expectations between buyers and sellers…suggesting that it will still be some time before market liquidity returns,” MSCI analyst Tom Leahy said in a note. I wrote it.
Blackstone and Nuveen declined to comment.
CoStar data shows office vacancy rates are rising across major cities due to the coronavirus pandemic and the rise in hybrid working, with London at around 10%, the highest in 20 years. Ta.
Corporate demand for office space is highly divided, with competition for the best spaces with modern equipment and green credentials, but little interest in older or poorly located buildings. .
The Ham Can (named for its distinctive rounded shape) at 70 St. Mary’s Ax was seen as a test of the demand for quality buildings. It is fully leased with long-term average lease terms to tenants including law firm Sidley Austin, National Bank of Canada, and Samsung Electronics.
Nuveen, the asset management arm of US retirement services company TIAA, was the original developer of the 21-story tower, which was completed in 2019. The company had previously sought to sell it in 2022 for around £400m.
