The famous Gherkin Building at 30 St. Mary Axe in London is being marketed by its receivers and agents for $1.17 billion, according to several news reports.
The Gherkin building is looking for a buyer and will be sold to anyone who can shell out more than a billion for the "cucumber-shaped" structure that has become a London-skyline staple.
Savills and Deloitte real estate have been instructed by The Gherkin building's receivers to start preparing marketing and ad campaigns to sell the 40-storey structure. The agents expect a lot of overseas interest, especially from sovereign wealth funds of the Middle East, for the renowned building, according to The Guardian.
Stephen Down, head of Central London Investment at Savills, told BBC that they have "set the ball rolling" and also expects offers from Hong Kong, China and Singaporean buyers. He added that once bids start pouring in, both the parties will partake in a vetting process - a thorough review of the deal - and once agreed upon, they expect to complete transaction by September, this year.
Down also added that the building could receive more than the expected $1.17 billion.
News of the building going up for sale comes at a time when the office property market in the city is flourishing.
"Not only have we witnessed a sustained appetite from international investors for assets in London but we have seen a substantial improvement in business growth and take up of office supply as the Capital's economy continues to improve," Down was quoted by the Sydney Morning Herald.
Receivership
The Gherkin was placed on receivership after owners VG Immobilien, a German real estate firm, defaulted on a loan they took to purchase the building.
Receivership in the U.K. is the same as bankruptcy protection in the U.S. When a firm files for receivership, the property is transferred to a creditor or receiver by a bankruptcy court. The receiver has all the decision-making rights regarding the assets. Its duty is to recoup the loans as much as possible. In most cases receivers liquidate the assets to pay back the loan.
VG Immobilien purchased the building in 2007 from architects Norman + Foster for $1 billion. The Germany-based realty firm financed the deal through a loan, part of which was in Swiss Francs. The currency has gained about 63 percent on the dollar in the last seven years, which ballooned the debt price to a point that it breached levels of debt allowed to be held in the country.
Deloitte was appointed the receiver of the building at that time and officials of the finance firm said they would work towards preserving the value of the structure.
"As soon as the building went into receivership we started to see interest from the US, Asia and the Middle East. I expect a lot of interest in this from the Middle and Far East," Down was quoted by The Telegraph.
The Gherkin Building
The Gherkin is one of the most famous buildings of London. It is the third tallest tower of the city, shooting up to 590 feet. The building plaza measures an area of about 505,000 square feet, equal to the size of eight tennis courts. Some of its tenants include Ion Trading, Kirkland and Ellis and Standard Life Investments.
When the Gherkin building opened 10 years ago, it was both admired and ridiculed. It has often been the butt of architectural mockery for its "phallus-like" structure.
