THE £1 BILLION-PLUS Citi Tower in Canary Wharf, in which the National Asset Management Agency has a near 30 per cent interest having taken control of a loan held by Derek Quinlan, has been withdrawn from sale.
Jones Lang LaSalle in London, the selling agent for the property, yesterday confirmed to The Irish Times that the 42-storey glass tower at 25 Canada Square had been withdrawn from the market.
An agent at the real estate group said a “number of offers” had been received for the property, which was put up for sale in April. “We are continuing to advise the sellers,” the agent added.
According to a report in the UK trade publication Property Week, the building was withdrawn while the creditors to the property discuss the implications of a recent legal ruling that affects rental payments.
The building is believed to have attracted interest from bidders such as Legal General, China Investment Corporation and Evans Randall.
A Court of Appeal ruling has made the acquisition less appealing. The outcome of a case between House of Fraser and its landlord on Victoria Street in London means landlords cannot necessarily pursue guarantors where leases have been assigned.
Citi occupies the property on a lease that expires in 2037. It pays £57.6 million (€66 million) a year and the rent is subject to an “uplift” in October 2015.
In April, Jones Lang LaSalle indicated that prospective purchasers could expect the annual income return to reach nearly £70 million within 10 years and more than £100 million within 20 years.
This lease is assigned to a Citi subsidiary – CIB Properties Ltd – and potential buyers are unwilling to pay the £1 billion-plus sought for the building with the uncertainty created by the legal case.
A sale is still thought likely in the medium term but the owners and creditors are reviewing their options.
The building is owned by companies controlled by Glenn Mauds Propinvest Group and Mr Quinlan, and was bought from the Royal Bank of Scotland in 2007 for £1.1 billion. Mr Quinlan’s debt has been transferred to Nama, which declined to comment on the sale yesterday. A group of banks lent £875 million of senior debt against the building. Some of this is now controlled by Nama.
The building in Canada Square comprises 1.2 million sq ft of office and retail space and is situated at the heart of Canary Wharf. It is one of the three tallest occupied buildings in Britain and was completed in 2002.
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