More than £130bn of global wealth is chasing one of London’s most iconic towers, with the Asian powerhouse leading the way.
Upwards of 200 parties from all over the world tabled registrations of interest to buy the £650m Gherkin at 30 St Mary Axe, EC3, this week.
Potential bidders from 40 countries are pursing the 516,000 sq ft City trophy, with Asian investors accounting for 40% of registrations.
The level of interest is in stark contrast to the last time the Gherkin came to market in 2006, when no bids came from Asia and its most active countries – Hong Kong, China, Singapore and Korea.
North American investors are the second most interested in the property this time, making up 20% of all registrations, followed by 15% from the Middle East and just 10% from the UK.
Jamie Olley, head of City investment at Deloitte Real Estate, which is selling the Gherkin with Savills, said: “There has been a phenomenal global response, which has shown the continued demand and wave of commitment there is for London real estate.”
The registrations figure is five times higher than received when the tower last sold.
Some 40 bids were submitted then, with Europe, particularly the German funds, leading the pack with 35% of the interest. North America and Ireland made up 25% each, while the UK showed little interest. Irish interest was unsurprisingly absent this time.
The shift in buyer profiles is a reflection of the changing face of real estate investment after the shrinking debt market post-recession opened up the sector to fresh sources of equity.
According to figures from JLL, the level of Asian investment in London commercial property has moved from zero in 2008 to 4% in 2010, to 25% in 2012 and to a third of all sales last year.
Savills’ head of central London Stephen Down said: “There has been a host of new companies and high-net-worth individuals targeting properties in the capital, with more worldwide interest than ever before.”
The Gherkin was put up for sale earlier this summer after senior lenders to the property called in receivers from Deloitte.
The tower is owned jointly by Evans Randall and Deutsche Immobilien Holdings, the real estate arm of Zech Group, which acquired its stake as part of its purchase of IVG Private
Funds Management in March. A £396m loan secured against the building has been in default since 2012.
Deloitte Real Estate and Savills will now sift through the hundreds of registrations of interest and invite selected parties to view the building. A preferred bidder is expected to be selected by the end of next month.
