The owners of stalled London development the Pinnacle are in talks to secure some much-needed equity to get the scheme moving.
The proposed 64-storey tower, set to become the City’s tallest, has been stuck at seven storeys since the start of the year.
However, sources close to the project this week said that US giant Brookfield was in discussions with 90% owner Saudi Economic and Development Company and development manager Arab Investments about a possible cash injection.
The talks come ahead of a loan maturity in November for Arab, which borrowed £140m from HSH Nordbank to acquire the site. The loan has already been granted two previous one-year extensions.
SEDCO has long considered a sale of part of its share to raise further equity and help unlock a debt package.
The 60 investors behind SEDCO tasked HSBC with arranging a £600m financing deal to help fund the £800m construction cost more than two years ago. But with a leasing market starved of large office requirements and a lack of debt, construction work on the 1m sq ft tower came to a halt.
It is hoped that a deal to sell an equity stake in the project would allow a debt package to be put in place.
Architect Kohn Pedersen Fox is thought to be working on design alterations aimed at reducing the building’s cost.
Brookfield’s construction arm, Multiplex, is already engaged on the project.
An involved source said: “It is early days, but we are pleased things appear to be progressing. It is important that people know the project is not in limbo.”
Brookfield, advised by GM Real Estate, made waves in the City’s property market this year after buying the bulk of Hammerson’s central London portfolio for £518m. The deal was part of an ambitious drive to increase its real estate footprint in Europe.
Savills is advising Arab Investments.
Brookfield this week hired Martin Wallace, Montagu Evans’ head of City and West End agency, to lead its UK leasing team. Brookfield senior vice-president of development and investment, Martin Jepson, said: “Brookfield now has a significant presence in the City of London’s office market via the acquisition of the Hammerson portfolio and we are committed to optimising returns from this exciting deal. Martin’s expertise is key to achieving this objective.”
