Hsbc's #1bn tower sale

By admin on May 3, 2007 12:00 AM

IT'S OFFICIAL - HSBC has smashed the record for the most expensive single property sale in the UK after flogging its iconic Canary Wharf tower for #1.1billion.
The deal dwarfs the previous record set by Swiss Re when it sold off the Gherkin - that building was snapped up for a mere #600million by a German property firm.
The Spanish company Metrovacesa has taken a 998-year lease on the HSBC tower at 8 Canada Square. But nothing will change for the 8,000 HSBC workers in Canary Wharf according to the banking giant.

HSBC will lease the 210m tower back for 25 years, paying an annual rent of #43.5m, and will continue to manage the building's gym, canteen and car park.
Despite fears earlier this year that HSBC could leave the UK due to tax reasons, the tower will continue to house the bank's headquarters.
The building, which cost #500m to construct, has been the company's global HQ since 2002.
HSBC has made the sale as part of plans to exploit the value of its property portfolio.
The bank's chief operating officer David Hodgkinson said: "This is a good opportunity for HSBC to manage its property assets effectively.
"London is one of the great crossroads of the world and there is no better place for HSBC to be headquartered."
The sale is expected to be completed by July. Metrovacesa's deputy chairman, Jesus Garcia de Ponga, described the purchase as a "compelling investment opportunity".
HSBC declined to say how much profit it will make on the deal. However, having spent #500m on construction and about #80m on fixtures and fittings, it would appear likely it has made a profit of about #500m.
This is set to boost HSBC's interim results for 2007. HSBC is among many banks to have taken advantage of high property prices in recent months.
Merrill Lynch and Goldman Sachs have just sold their London headquarters while Barclays has recently sold hundreds of branches.
It is understood that HSBC, which last year sold #200m of property, including 77 UK branches, will this year seek to sell a further 100 high street branches in Britain.
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