FINANCE: The Qatar Investment Authority has approached up to 10 banks to finance its £1.2bn acquisition of the HSBC Tower in Canary Wharf, E14.
The sovereign wealth fund bought 8 Canada Square in a cash deal from the National Pension Service of Korea in December. It is now looking for a maximum loan-to-value ratio of 60% – or around £715m of new debt – at a margin of between 125 and 135bps over Libor.
HSBC has 12 years left on its lease on the tower, where it pays a current annual rent of around £50m, with fixed uplifts. However, this
week the bank announced it would move as many as
1,000 staff to Birmingham as part of a plan to ringfence its retail operation (p30).
The most likely bidders for the financing opportunity are believed to be banks with a close relationship to Middle Eastern investors.
While the financing of the HSBC Tower has long been expected, observers believe that the coming months may see more oil-backed cash-rich investors looking to reduce their cash exposures across asset classes and introduce more debt as the price of oil continues to trade at low levels.
All parties declined to comment.
