Canary seeks £600m Walkie Talkie stake sale

By James Buckley - Wednesday, March 15, 2017 18:06

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Canary Wharf Group is in discussions to sell the 50% stake that it manages and part-owns in the Walkie Talkie, one of the iconic buildings of the City of London, for around £600m, CoStar News can reveal.

The group has approached a handful of agents about pitching for the mandate to sell the half share in the building at 20 Fenchurch Street, EC3, at a level which would value the whole tower at around £1.2bn.

As it stands, Canary’s joint venture partner Land Securities is understood to want to retain its remaining 50% ownership of the building. However, given the depth of interest from underbidders on this month’s £1.15bn sale of nearby tower the Cheesegrater to Hong Kong Investor CC Land, there may yet be a compelling case for LandSecs to exit its stake as well.

British Land opted to sell its stake in the Cheesegrater, otherwise known as the Leadenhall Building, last year for £500m before interest from CC Land, as well as Korea Investment Corporation and Temasek prompted JV partner Oxford Properties to sell its share as well in a move which commanded a premium price for the whole asset.

Canary Wharf Group controls a 50% interest in the building at 20 Fenchurch Street and manages it on behalf of investors including Qatar Investment Authority, China Investment Corporation, Morgan Stanley Real Estate Investing and Brookfield.

The 688,000 sq ft office building is fully let. The first office tenant took occupation in May 2014 and the Sky Garden opened in January 2015. Construction on the Walkie Talkie began at the start of 2011 before completing in 2014. Floor plates in the building range from 14,000 – 28,000 sq ft

Land Securities sold a 50% stake in the Walkie Talkie to Canary Wharf Group in 2010, whose principal shareholders were China Investment Corporation, MSREI, Brookfield and Qatar Investment Authority.

CWG retained a 15% stake in 20 Fenchurch Street before selling on three 11.7% stakes to MSREI, CIC and QIA respectively. CWG continued to manage the 50% interest in the building on behalf of the investors.

Morgan Stanley Real Estate has already been trying to sell its stake of almost 12% in the London skyscraper for around £120m. The stake forms part of the overall 50% interest that is controlled by Canary Wharf Group. According to Bloomberg, China Investment Corp., which owns a portion of the 20 Fenchurch Street building, is considering bidding for the stake and has around a month to agree a deal with Morgan Stanley before the holding is offered to other potential buyers.

jbuckley@costar.co.uk

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