Blackstone ups bid for ‘Can of Ham’ London tower to £330 million
For the world’s largest alternative asset manager, the move is a big bet on London’s office rents as the lack of new construction creates conditions for a supply crunch
[LONDON] Blackstone has sweetened its offer for London’s Can of Ham skyscraper with a bid of about £330 million (S$570 million), upping its wager on rising office rents in the City.
While negotiations to secure exclusivity are in an advanced stage, they could still fall apart because a final agreement has not been reached, according to sources familiar with the matter. The previous top bid for the building – an offer of just over £300 million late last year, also from Blackstone – collapsed after falling short of the roughly £322 million asking price.
A deal, if successful, would value the building at a yield of less than 6 per cent, the sources added, asking not to be identified because the information is private. It would be one of London’s biggest office sales in recent years.
Representatives for Blackstone and Nuveen declined to comment.
Investors led by Nuveen had offered the property at 70 St Mary Axe for sale in September. The 24-storey London tower is called Can of Ham because its ovoid form often draws comparisons to the shape of a tin of British luncheon meat. Situated close to The Gherkin skyscraper, it was completed just before the pandemic. Its sale has been seen as a test of demand for good-quality office buildings.
For the world’s largest alternative asset manager, the move is a big bet on London’s office rents as the lack of new construction creates conditions for a supply crunch. The tower has a few leases that will be coming up for review soon, giving Blackstone a chance to earn more from tenants. The New York-based firm is also nearing an agreement to purchase a 50-storey Midtown Manhattan building, Bloomberg News reported late January.
London’s office market has seen anaemic activity since interest rates started rising in 2022. Central London office investment totalled just £6.4 billion last year, the lowest since 2009, according to data compiled by broker Savills. Anticipating a long-stalled recovery, some owners of trophy London office properties are currently preparing a raft of sales. BLOOMBERG
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