Quinlan, Propinvest buy Citigroup's London HQ for £1 bn

Quinlan Private's founder Derek Quinlan and investment company Propinvest are acquiring the European headquarters of Citigroup bank in London for £1 bn (about EUR 1.4 bn). The sale of the 42-storey office skyscraper at Canary Wharf is the second-largest single-property transaction ever seen in the UK. Just three months ago, Spain's Metrovacesa surprised the UK property sector by snapping up the HSBC tower, also in Canary Wharf, for £1.1 bn in the largest single-asset property deal in the UK.

The Quinlan/PropInvest 50/50 joint venture is buying the 113,665 m² tower from the Royal Bank of Scotland in a sale-and-leaseback deal. The trophy asset will be leased back to Citigroup for 25 years without a break option and the lease is subject to standard five-year upward reviews.

The initial yield comes to 4.5%, beating the much lower 3.8% yield generated by the HSBC deal.

'This is a long-term personal investment in a prime property in the heart of London's new financial centre,' said Derek Quinlan. 'The quality of this asset is matched by the calibre of its long-term tenant, Citigroup, the world's largest bank.'

Royal Bank of Scotland was advised by Lazard. BH2 and CB Richard Ellis acted for Quinlan Private and Propinvest.

Real estate investors have acquired 14 single real estate assets for over $ 1 bn each so far this year - the same number as all of 2006, and almost five times the level of 2005, according Jones Lang LaSalle's International Capital Group. Click on the link below to find out more.