Canary Wharf office set to sell from administration for £110m

Israeli investor Ariomori has agreed terms to buy a Canary Wharf office building that went into administration last year for £110m. The company is set to buy 5 Churchill Place, E14, after Hong Kong-based owner Cheung Kei Group defaulted on loan payments for the property. The 313,000 sq ft office building received six formal offer letters and expressions of interest when the site went to the second round of bids in December last year. These fell between £75m-£100m, reflecting a net initial yield of around 13-17% and a capital value of under £300 per sq ft. Those bids were significantly below the site’s circa £400m price tag in 2022, when Cheung Kei Group unsuccessfully tried to sell the Docklands asset. The investment firm, led by Shenzhen-based tycoon Chen Hongtian, bought the building for a reported £270m in 2017 with £196m of senior and mezzanine debt financing its purchase.  That included around £175m of senior debt provided by Lloyds Banking Group, according to an administrators’ report filed in December last year. Occupiers include JP Morgan, which is the anchor tenant. The WAULT is 10 years to break, while the net passing rent is £41.11 per sq ft. FTI Consulting was brought on to oversee the administration on behalf of a syndicate of senior lenders in May last year, after which Savills was instructed to sell the property. The sale process was officially launched in October. The deal is expected to close on Friday. Note: This article has been corrected since it was first published – the buyer was originally incorrectly reported as Menomadin Group. See occupational sale comparables in E14>>