London's Gherkin put up for sale at €820m

Savills and Deloitte Real Estate have been jointly instructed to sell the iconic Gherkin office tower at 30 St Mary Axe in the City of London following the appointment of Deloitte as receivers.

The marketing of this landmark 505,000 sq ft (46,914 m2) office building is due to start shortly with interest expected to come from all corners of the globe, the agents said in a statement. The guide price is £640 mln (€820 mln).

Designed by Lord Foster, the 40-storey skyscraper opened in 2004 and is currently let to approximately 20 tenants including Swiss Re, Kirkland & Ellis International LLP and ION Trading.

Stephen Down, head of Central London investment at Savills, commented: 'This is a prestigious appointment on what is a globally recognised landmark building, which sits in the heart of London’s business core. The Central London commercial property market has benefitted from improving market conditions over the course of the last few years. Not only have we witnessed a sustained appetite from international investors for assets in London but we have seen a substantial improvement in business growth and take-up of office supply as the capital’s economy continues to improve.'

Lenders put the building into receivership in April after its owners, Germany's IVG and investment bank Evans Randall, defaulted on loans.

The London market is ‘incredibly hot at present, with a real depth of buyers and mounting competition’, according to David Hutchings, head of EMEA investment strategy at Cushman & Wakefield in London. ‘Large assets are in particularly strong demand because they offer a quick route to getting invested,’ Hutchings said.

The Gherkin is the latest office tower to come for sale. Earlier this summer, the South Korean pension fund, National Pension Service of Korea (NPS) put HSBC’s global headquarters, London’s largest and most expensive office tower, on the market.

JLL and GM Real Estate have been hired to market the landmark tower by JP Morgan, which is acting on behalf of the owner.

The Canary Wharf landmark has a chequered history and has been sold a number of times in recent years. NPS bought the building for £772.5 mln in cash in 2009. It was sold just two years previously to listed Spanish property group Metrovacesa for £1.09 bn. Sold at the height of the property boom, the deal marked the single largest commercial property sale London had ever seen. However, just one year later, Metrovacesa was forced to sell the property back to HSBC when it defaulted on loans.