The sale of HSBC's headquarters in London's Canary Wharf to Spanish property firm Metrovacesa for £1.09 bn in 2007 and the subsequent buyback of the property a year later at a big profit has emerged as the winner of the office category in PropertyEU's Deal of the Decade Awards.
HSBC’S headquarters in London’s Canary Wharf has a chequered history and was traded a number of times between 2007 and 2014. In 2007 HSBC sold the landmark office to Spanish listed property group Metrovacesa for £1.09 bn.
The deal was struck at the peak of the property boom, making it the largest single-asset transaction ever in the UK. CBRE and Colliers acted as advisers to the buyer, while JLL acted for the seller.
A year later, HSBC bought the building back for £838 mln, yielding it a £250 mln profit. In 2009, HSBC subsequently sold its HQ to the National Pension Service (NPS) of South Korea for £772.5 mln in cash.
Five years later, in 2014, NPS, via JP Morgan, sold the property to the Qatar Investment Authority for £1.1 bn, again making it the most expensive building in the UK.
Jury comment
The judges said that the double deal - in 2007 and 2008 - shows HSBC’s impeccable timing and creative approach. ‘The transaction showed how fleet of foot a big organisation can be and how with a global investment perspective market timing can be perfected.’
It added: ‘The saying goes that real estate is all about “location, location and location” and that is true, but when it comes to transacting it is all about “timing, timing and timing”. HSBC timed their transactions to near perfection. Simply brilliant!’
1ST RUNNER-UP
In 2013 Victory Advisors bought The Atrium in Amsterdam for €100 mln from Avestus (formerly known as Quinlan Private) and Lloyds Bank. Rutger&Posch, Freshfields Bruckhaus Deringer and Rechstaete advised the buyer, while CBRE, Loyens Loeff and Allen&Overy acted for the seller.
Jury comment
The judges said the deal shows the buyer’s vision, timing and ability in acquiring an asset riddled with technical problems and tenant issues at a time of economic crisis, overcoming all the issues (including turning to an alternative lender for financing because banks were not interested) and then turning the asset around. The Atrium was ‘far from an obvious investment at the time’, the jury said, but it is now being transformed into a state-of-the-art 60,000 m2 full-service complex. The acquisition also marked the bottom of the market in the Netherlands and sparked a new interest in investing in the Dutch office market.
In its motivation for submitting the deal, Victory Advisors said: ‘The word that best captures the running theme of this investment is “conviction”. In the face of overwhelming obstacles during and after its acquisition, it has been only through our conviction that the investment has gotten to where it is. Conviction in the contrarian bet that the Dutch economy and its office market would turn around and recover, conviction that the Atrium could be and would become the best building in the best area of the country, conviction that we could come to solve the many problems facing the asset.’
Editorial comment: The Atrium was acquired by French investment manager Amundi Real Estate in mid-April 2017 for €500 mln, making it the largest single-asset transaction ever in the Netherlands.
2ND RUNNER-UP
In 2013 AXA IM – Real Assets acquired 6 St Pancras Square, in King’s Cross, London for £320 mln (€400 mln) from BNP Paribas RE Property Development. BNP Paribas also acted as advisor to the buyer. The judges described the project as a ‘game changer’. After buying the land opposite St Pancras Station in 2011 from Argent, the lead developer in the ongoing regeneration of King’s Cross, BNP Paribas RE developed, funded, project-managed, fitted out, leased, sold and managed the building. Google has chosen it as the location for its UK headquarters. The deal marked the entry of BNP Paribas into the UK market, and was a key milestone in the regeneration of King’s Cross which has transformed wasteland into a vibrant new quarter.
Motivating the submission, BNP Paribas Real Estate said: ‘No other adviser can claim to develop, fund, project manage, fit out, lease, sell and manage a building, but that’s exactly what BNP Paribas Real Estate did at 6 Pancras Square, King’s Cross.’
