Landmark London office tower sale falls through on pricing deadlock: sources

BLACKSTONE has pulled out of talks to buy a landmark office property in the City of London after its owner Nuveen refused an offer of around £300 million (S$513.5 million), two sources familiar with the matter told Reuters.

A deal at that level would have represented one of the largest transactions in European real estate this year, but the two parties failed to agree on a price for the building at 70 St Mary’s Axe, locally known as the “Can of Ham”.

The 516,000 square foot property, which is let to a range of tenants including law firm Sidley and energy firm Vattenfall, remains on the market, one of the sources said.

News of Blackstone’s unsuccessful offer was first reported by Green Street News.

Real estate markets globally have struggled to shake off a post-pandemic malaise of declining occupancy and market values, complicating some transactions and leaving lenders fearful for the security of debt lent against some non-prime assets.

The “Can of Ham” is one of several big-ticket office properties in Britain on sale that are being watched closely as a test for whether buyers and sellers can agree on price, or whether the drought in deal volumes continues.

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Analysts at Jefferies on Tuesday (Dec 10) said that office markets in London, Paris and New York faced “new realities”, with increased demand for more flexible, attractive office space to woo staff reluctant to ditch remote working.

Citing a study by global property services firm Cushman & Wakefield, the Jefferies note added that 86 per cent of employees want to work at least three days a week in the office in France, compared to 83 per cent in the UK and 57 per cent in the US.