Iconic Gherkin sold for record £600m

Iconic London building the Gherkin was today sold for a record £600m (€908.3m) in a deal thought to be the most ever paid for an office property in Britain.

Iconic London building the Gherkin was today sold for a record £600m (€908.3m) in a deal thought to be the most ever paid for an office property in Britain.

Insurance group Swiss Re sold the 41-storey office block, officially known as 30 St Mary Axe, to German real estate group IVG Immobilien just three years after it opened.

The Gherkin’s sale price is more than double the building’s estimated cost of construction and overtakes the £520m (€787.2m) sale last year of CityPoint in London to become the most paid for a single building in Britain.

Swiss Re is reportedly making up to £250m (€378.5m) on the sale and will remain as a tenant in the building, which can command up to £65 (€98.4m) per square foot in rental income.

IVG bought the building in a joint venture with investment bank Evans Randall, which sees them both own 50% of the property.

Swiss Re said a number of other suitors had shown an interest in buying the Gherkin since it was put on the market last September.

The group has had trouble renting out all the building, which still has at least one floor vacant.

Tenants include German insurer Allianz and law firm Kirkland and Ellis, although Swiss Re occupies half of the space.

IVG plans to put the bulk of its 50% share of the property into tax efficient German property funds, while Evans Randall will tout the bulk of its stake to private and institutional investors.

The Gherkin was designed for Swiss Re by Lord Norman Foster, the architect behind the new Wembley Stadium and the Millennium Bridge in London.

Lord Foster has won awards for the design of the landmark skyscraper, including the coveted Stirling Prize, but the building has experienced some teething troubles since opening in late 2003.

A window fell out in 2005 after a fault in the automatic opening system, forcing owner Swiss Re to seal all of the windows shut in temporary safety measures.

Thousands of the panels of glass also had to be replaced after the appearance of cracks.

New owners IVG and Evans Randall are not planning any changes to the building or its use.

Swiss Re chief executive Jacques Aigrain said: “In IVG Immobilien we have found a future owner who will maintain and preserve the superior quality of this outstanding property.”

Swiss Re has the option to remain as a tenant until at least 2031.

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