The creditors of London’s Gherkin office tower Deloitte has placed the skyscraper into receivership, clearing the way for the sale of the building.
The Gherkin is owned by Germany’s IVG Immobilien and its investment banking partner Evans Randall. The 30 St Mary Axe building’s sale is expected to generate more than £550m from potential buyers.
According to Deloitte, the building has been leased since the initial default in 2009, but as IVG Immobilien ran into debt issues, the company was forced to take control of the tower.
IVG Immobilien was affected by the asset’s complex multi-currency capital structure and the adverse interest rate and currency movements, which prevented it from paying the debts.
Deloitte receiver Phil Bowers was quoted by the Guardian as saying that this is a building in trophy condition whose space is 99% leased.
“The multi-currency deal that financed the Gherkin has been affected by the substantial appreciation of the Swiss franc against the pound,” Bowers added.
The 180m, 41-storey tower is London’s third-tallest building after the Shard and One Canada Square.
The £238m tower was developed by Zurich-based Swiss Re ten years ago and sold to IVG and Evans in 2007 for £630m.
Gherkin’s tenants include Swiss Re, Sky News and the highest private club in London.
Deloitte noted that the tenants would not be affected by the receivership.
Deloitte joint receiver and restructuring services partner Neville Kahn said the senior lenders were reluctant to appoint a receiver but had no choice due to on-going defaults for the passed five years. There were also concerns that the borrowers’ lack of equity in the transaction had misaligned their incentives with the lenders.
“The Gherkin is a truly exceptional building; a landmark recognised around the globe. Our priority is to preserve the value of this asset. We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants,” Kahn said.