Sale Mooted For HSBC World Headquarters

Sale Mooted For HSBC World Headquarters

The Norman Foster designed HSBC headquarters at 8 Canada Square, Canary Wharf, London, could become Britain's most expensive building ever if a sale and leaseback deal by HSBC is realised.

At 199.5 metres tall it has 102,000 metres of gross floor-space making it the third largest skyscraper by floor area in the U.K. The building could set up to £800 million on the open market, easily thrashing the current record for a building in the U.K. Putting this in perspective Swiss RE are rumoured to be selling their famous gherkin for a shade under £600 million.

With property prices as high as they are in London, owning a skyscraper is a big unrealised asset on the balance sheet of any company and one that can be fully exploited if there is a good lease-back deal that means the bank doesn't have to relocate.

These deals are normally worked out in the form of the owner of the building getting a large sum of money, in this case it would be the £800 million. In return they then rent the building back for a period of time - industry sources indicate it would be 15 years.

The previous owner of the building gets the big fat lump sum, shareholders are pleased that the assets of the company they own a bit of are being made to work harder for them, whilst the new owner has a guarantee of tenancy for X number of years from a big client so both sides can come out of it ahead.

The advisors of the sale are CB Richard Ellis who will no doubt by rubbing their hands in glee at the fee from a possible sale.

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