Brazilian investment group Safra has emerged as the buyer of London's Gherkin skyscraper from receivers Deloitte, outbidding over 200 prospective buyers that signalled an interest in the iconic asset last month.
Brazilian investment group Safra has emerged as the buyer of London's Gherkin skyscraper from receivers Deloitte, outbidding over 200 prospective buyers that signalled an interest in the iconic asset last month.
The Safra Group, controlled by billionaire Joseph Safra, announced on Monday that it is to buy the 180-metre high office tower at 30 St Mary Axe for an undisclosed amount. However, market rumours put the transaction price at £726 mln (€927 mln), representing a yield of 3.8%.
The deal reflects a 12% premium to the asset's guide price of £640 mln as well as a 21% premium to the asset's sales price in the peak year of 2006.
'The acquisition of 30 St Mary Axe is consistent with our real estate strategy of investing in properties that are truly special – at the best locations within great cities,' commented Safra Group.
The deal is the group's first foray into the UK commercial property market. 'While only 10 years old, this building is already a London icon that is distinguished from others in the market, with excellent value growth potential. We intend to make the building even better and more desirable through active ownership that will lead to a range of enhancements that will benefit tenants,' Safra added.
The Safra Group has assets under management of over $200 bn. The group operates banks and invests in a wide array of businesses across North and South America, Europe, the Middle East and Asia.
Savills and Deloitte Real Estate were instructed in July to sell the landmark building in the City of London after its previous owners Evans Randall and German firm IVG failed to strike a restructuring deal over its spiralling debts this summer.
IVG and Evans Randall bought the Gherkin from its original owner, insurer Swiss Re, in 2006, for £600 mln, using £396 mln of debt from a five-bank consortium led by BayernLB and including Deka, Helaba, ING and LBBW. IVG and Evans Randall were hit by the European financial crisis, which meant that by 2009 the Gherkin’s value had dropped to £480 mln. Swiss Re still occupies the lower half of the building.
The Gherkin, so dubbed because of its distinctive shape, was designed by Sir Norman Foster of Foster & Partners and comprises 505,000 sq ft (50,000 m2). It is arguably the most recognisable building in the city as well as London's second highest scheme.
Completed in 2004, the asset is currently 99% let with its largest tenants being Swiss Re and Kirkland & Ellis.
