QIA completes HSBC tower's €723m refinancing

A subsidiary of Qatar Investment Authority (QIA) has completed the £625 mln (€723 mln) refinancing of global bank HSBC's Canary Wharf headquarters.

The office tower at 8 Canada Square was refinanced for five years by a club of six banks including Crédit Agricole, CIB, DekaBank, Deutsche Bank, DBS Bank, and HSBC Bank.

The property's Dutch-based ownership vehicle, Project Maple II, which also holds properties in the Netherlands, oversaw the process.

Owership history
The Qatari group purchased the asset in 2014 for £1.1 bn, after a seven year period in which the property changed hands several times.

In 2007 HSBC sold the landmark office to Madrid-listed property group Metrovacesa for £1.09 bn in a sale-and-leaseback deal that included a 20 year tenancy agreement.

The deal was struck at the peak of the property boom, making it the UK's largest single-asset transaction ever at the time. CBRE and Colliers acted as advisors to the buyer, while JLL acted for the seller.

A year later, HSBC bought the building back for £838 mln, yielding a £250 mln profit. In 2009, the bank 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.

Loan progress
QIA's purchase was financed a year after the 2014 deal with a £705 mln senior-loan loan provided by Lloyds Bank, Qatar National Bank and DekaBank. The loan was due to expire in 2020.

Industry sources said that QIA had been able to take advantage of the current low-margin lending environment with the new arrangement, without being exposed to early repayment fees.

The Docklands tower is let to HSBC until 2027, according to the terms of the original sale-and-leaseback agreement with Metrovacesa. The bank has an option to break the lease in 2022, fuelling speculation that HSBC may move some of its operations to Asia.


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