Heron Secures Equity Bishopsgate Tower Sold

Heron Secures Equity Bishopsgate Tower Sold

In two massive details, Arab investors are to pump over £700 million into prestigious skyscraper schemes in the London.

Following consultations between three different groups with Heron playing piggy in the middle to decide the best, the property developer has finally picked a backer to provide it with a substantial input of equity to fund their planned Heron Tower and associated buildings in the City of London.

The winning bid comes from the State of Oman and Strategic Real Investors who have clubbed together to contribute a whopping £500 million to help pay for the scheme. It has not been revealed who the losing parties were but competition between them shows the eagerness for a stake in such a leading development.

Additionally Heron are set to dispose of their Heron City leisure development in the Barcelona, one of their many around Europe, for £95 million as well as contribute £44 million of their own money. The company has built this cash up gradually over a number of years thanks to high-profile disposals.

Oman has been investing heavily in a UK property portfolio, particularly in the capital where their previous record was the £65 million they paid for 99 Queen Victoria Street.

This injection of capital not only knocks back the nay-sayers who doubted the scheme would ever get off the ground but should show continuing confidence in the London office market for this up and coming cycle.

The Heron Tower development includes not only a 202 metre tall building but also a nearby planned approved 99 metre tall called Heron Plaza and a lower-rise building that will offer a substantial amount of retail space.

The scheme which has been tailor designed by Kohn Pedersen Fox Architects as a couple of vertical villages for companies occupying only a few floors each will be built over several phases with demolition starting on site in 2007. Preparation works have been ongoing throughout 2006 and delivery of the first phase of the scheme should be in 2010.

Middle Eastern money has also helped Beetham's planned London tower get off the ground whilst the State of Dubai is linked to a potential of 30 St Mary's Axe but perhaps the most important one is to be made by Arab Investments.

They have placed an offer on the Bishopsgate Tower site for £200 million to aquire it from the developer DIFA who own it. DIFA were only yesterday aquired by Union Investment Real Estate AG who bought a majority shareholding in the company and plan to rename it.

The site currently occupied by Crosby Court has a 288 metre tall skyscraper approved for it also designed by KPF that's best known as the Helter Skelter. If built this will be by far the tallest building in the City of London by almost 70 metres.

In purchasing the plot for such a large sum clearly Arab Investments have no intention of building a groundscraper for that money. The tower has 88,000 square metres of space and the only way they could get a return on such a sizeable chunk of money is by building a sizable chunk of office space such as what is approved. In effect Arab Investments are buying not only the site but also the scheme approved for it so they can develop it themselves.

Unlike Heron this scheme still has no start date but the purchase of it does mark a major move forwards and bring construction a step closer to reality.

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