HSBC is examining the possibility of re-selling its head office in London's Canary Wharf just months after buying the property back at a hefty discount to unravel what had been the largest single-asset real estate transaction in UK history.
HSBC is examining the possibility of re-selling its head office in London's Canary Wharf just months after buying the property back at a hefty discount to unravel what had been the largest single-asset real estate transaction in UK history.
Aside from its London tower, Europe's largest bank is also mulling the sale of its head offices in Paris and New York after approaches from potential bidders. A spokesperson for HSBC confirmed to the media that the bank was examining the possibility of entering into sale-and-leaseback agreements. Responding to a newspaper report at the weekend, the spokesperson said: 'We are taking a look at the market, yes. There are people interested in buying at an appropriate price.'
The Sunday Times reported that HSBC hopes to raise about EUR 3 bn from selling the three buildings. CB Richard Ellis has been appointed to advise the bank on the process.
HSBC sold the 45-storey trophy building at Canary Wharf to Spanish real estate group Metrovacesa in May 2007 for £1.09 bn (then EUR 1.6 bn). The bank agreed to lease back the property for 20 years at an initial annual rent of £43.5 mln, representing a net initial yield of 3.8%. The purchase was funded by Metrovacesa via a cash equity injection of £280 mln and a bridge loan of £810 mln provided by HSBC.
HSBC re-acquired the tower in December 2008 for £838 mln (at the time EUR 968 mln) after the ailing Spanish firm was unable to refinance the loan.
