London Office Tower Could Be Sold

S$1.4b London Office Tower Could Be Sold To Singapore Or Hong Kong Buyer

UNITED KINGDOM – The Scalpel, one of the most well-known skyscrapers in the City of London, is being offered to would-be buyers for around £820 million (approx. S$1.44 billion), reported The Financial Times on Tuesday morning (20 October).

According to sources who requested not to be named as the matter is private, the owner American insurance group W. R. Berkley Corporation is seeking buyers for the 36-storey office tower.

Built in 2018, the 406,000 sq ft skyscraper designed by Kohn Pedersen Fox still functions as W. R. Berkley’s European headquarters. Its other tenants include Lombard International and National Australia Bank.

One of the sources shared that the owner appointed marketing agents Cushman & Wakefield (C&W), as well as Eastdil, Secured to stimulate interest for the commercial property from “well-capitalized international investors”.

The most likely acquirer would be an ultra-rich buyer from Asia, usually, Singapore or Hong Kong, commented James Beckham, CBRE’s Head of London Investment Properties.

If the skyscraper along 52-54 Lime Street changes hands for £820 million, it would join the list of the most expensive office towers transacted in London behind the Canary Wharf offices that was acquired by Citigroup in April 2019 for over £1 billion.

However, The Scalpel’s proposed divestment is ill-timed as many people are working from home and large swathes of office space in the City of London are vacant. Nonetheless, it will test the demand for commercial property at a time of Brexit and COVID-19.

“Obviously there are a lot of question marks over the degree to which we will continue working from home,” said one of the sources who are involved in the sale. But “London always scores well (with investors) – there’s liquidity in the market, high-quality assets with long leases and the current weakness of the pound.”

CBRE’s Beckham concurs. “Global capital continues to be drawn to the London market, focusing on large-scale trophy buildings. Even given uncertainties around occupational strategies, investors are taking the long-term view.”

Moreover, The Scalpel is expected to fare better than other London office properties in attracting a buyer as it’s a freehold office tower and landmark building, he added.

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