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For sale: Stirling Prize-winning Gherkin

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The Stirling Prize-winning Gherkin skyscraper in the City of London has gone up for sale

Savills and Deloitte have been brought in to market the 40-storey Foster + Partners-designed tower after it fell into receivership in April.

The 46,914m² office building, which was voted as London’s top skyscraper in a recent Ipsos MORI survey, is expected to attract interest from across the world, with agents hoping for offers around £600 - £650million.

Opened in 2004, the 30 St Mary Axe building is currently multi-let to a number of tenants including Swiss Re, Kirkland and Ellis International and ION Trading.

Jamie Olley, head of City investment at Deloitte Real Estate, said: ‘The Gherkin is one of London’s famous landmark buildings and the most iconic office tower in the City’s skyline. For investors, this prime office property provides an attractive combination of stable and reversionary income with opportunities to add value via asset management. The property will appeal to a wide range of domestic and international investors and we are confident of maximising returns to the receivers and creditors.’

Stephen Down, Head of Central London Investment at Savills, said: ‘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.’

Previous story (AJ 24.04.14)

Gherkin goes into administration

Deloitte has been called in as administrator for the Stirling Prize-winning Gherkin skyscraper

The Foster + Partners-designed skyscraper in the City of London has fallen into receivership despite being described as in ‘trophy condition’.

The building, which was voted as London’s top skyscraper in a recent Ipsos MORI survey, has been leased consistently since it opened in 2004, but its owners have struggled with debt, defaulting on payments for the past five years.

Neville Kahn, joint receiver and restructuring services partner at Deloitte said: ‘The senior lenders were reluctant to appoint a receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for more than five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the lenders’.

He added: ‘The Gherkin is a truly exceptional building, a landmark recognised around the globe. Our priority is to preserve the value of this asset. We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants.’

The iconic 30 St Mary Axe building, which is the headquarters of Swiss Re, is co-owned by Germany’s IVG Immobilien, which went into bankruptcy in 2013.

A spokesperson for Evans Randall, adviser to Skyline Investments, which owns the Gherkin in a 50-50 partnership with IVG, commented: ‘As widely reported previously, the default has arisen largely as a consequence of the IVG tranche of the loan being denominated in Swiss Francs and has been exacerbated by the insolvency at IVG. These factors have so far impeded Evans Randall’s ability to restructure the financing on the asset, including the injection of new equity.

They added: ‘Evans Randall has equity ready to invest and has been unable to do so because of the inability to agree a consensual solution with IVG, given these uncertainties. We will be continuing the constructive discussions to date on a new financial structure. The Gherkin is a strong, well-let asset and one that we are firmly minded to continue our involvement in.’

30 St Mary Axe declined to comment on the announcement.

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