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Blackstone’s roughly £300mn bid to amass the “Can of Ham” skyscraper in London has fallen by means of, the newest signal that big-ticket workplace gross sales stay stalled by disagreements over what buildings are value.
The US group, the world’s largest business actual property investor, had been in unique negotiations to amass the constructing with a suggestion simply above £300mn, in line with folks aware of the method. However the vendor, Nuveen, was unwilling to simply accept a suggestion under the £322mn asking value.
The collapse of the talks, first reported by Inexperienced Avenue Information, stymies what would have been the largest workplace deal in London for 2 years.
Blackstone’s willingness to bid on a big, top-quality workplace constructing is nonetheless a optimistic signal for the workplace market after a bruising two years. Funding into London places of work within the first 9 months of the yr was the bottom since 2003, in line with MSCI.
However the value on supply from the US group is under the place many house owners are nonetheless valuing their tower. Nuveen had been trying to enhance on the asking value, one of many folks mentioned.
The 2 traders’ impasse over value counsel neither patrons nor sellers are able to compromise far sufficient to interrupt the dealmaking drought.
“There’s a hole in value expectations between patrons and sellers . . . suggesting there’s additional to go earlier than market liquidity returns,” MSCI analyst Tom Leahy wrote in a be aware.
Blackstone and Nuveen declined to remark.
Workplace emptiness charges have risen throughout main cities following the Covid-19 pandemic and the rise in hybrid working, hitting a 20-year excessive of about 10 per cent in London, in line with information from CoStar.
Demand for workplace house from corporations is sharply divided, with competitors for the very best house with trendy facilities and inexperienced credentials, however scarce curiosity in older or badly-located buildings.
The Can of Ham at 70 St Mary Axe — named due to its distinctive rounded form — was seen as a check of demand for good-quality buildings. It’s absolutely let with lengthy common lease phrases to tenants together with legislation agency Sidley Austin, Nationwide Financial institution of Canada and Samsung Electronics.
Nuveen, the asset administration arm of US retirement supplier TIAA, was the unique developer of the 21-storey tower, accomplished in 2019. It beforehand tried to promote in 2022 for about £400mn.
