London’s 5 Churchill Place Office Bldg Up For Sale
UNITED KINGDOM – Marketing agent Savills has launched a sales campaign for 5 Churchill Place, a 12-storey office tower in Canary Wharf, London that was built on a site with a remaining leasehold tenure of 985 years, reported Mingtiandi on Monday evening (16 October, SGT).
Notably, the commercial property was seized by creditors in May 2023 from mainland Chinese mogul Chen Hongtian, who had failed to pay loans collateralised by the office property, which previously housed the headquarters of Bear Stearns, an investment bank that went bust during the Global Financial Crisis.
Chen had originally purchased the 2009-vintage office building in 2017 for £270 million (then US$363 million), during a buying spree in which the Chinese tycoon paid record prices for homes and offices in Hong Kong and London. However, five of those assets including 5 Churchill Place have been seized by creditors earlier this year due to loan defaults.
Chen and his Shenzhen-based investment company Cheung Kei Group acquired 5 Churchill Place with the aid of a £175 million loan from Lloyd’s Bank and mezzanine debt provided by an unnamed global conglomerate. It is understood that Lloyd’s no longer holds the majority of that initial loan, which was deemed delinquent as of March 2023.
In the sales flyers distributed by Savills, no asking price was indicated. But Chen and Cheung Kei Group had attempted to sell the office property for over a year before it was seized by creditors. In 2022, they were asking for £260 million. Back then, it was said they had received bids for 5 Churchill Place, but all the offers were declined.
Located at Canary Wharf’s eastern side at the gateway to Wood Wharf close to the Elizabeth Line transit system, the office building spans 313,000 sq ft. Its current tenants are Credit Agricole & the World Association of Nuclear Operators (WANO), both which have started to lease in July 2023. The commercial property’s weighted average unexpired lease term to lease expiry now stands at 10.5 years. Additionally, the new owner will get air rights.
The listing of 5 Churchill Place comes as sales of office properties in central London plunged 64 percent year-on-year to around £1.2 billion in Q3 2023 as per data from Jones Lang LaSalle (JLL).
“The twin impacts of rapidly rising interest rates, coupled with structural challenges regarding the nature of office working have combined to deliver uncertainty to the marketplace,” commented JLL’s Head of central London capital markets Julian Sandbach, who believes that most of the value depreciation in the city’s office market has already occurred.