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The “Can of Ham” skyscraper in the City of London has been put up for sale for £322mn in a renewed test of the top end of the UK capital’s office market after a long slump in flagship sales.
The building at 70 St Mary Axe, named because of its distinctive rounded shape, has been put on the market by its owner Nuveen, the asset management arm of US retirement provider TIAA. Nuveen was the original developer of the 21-storey tower, near Liverpool Street station, completed in 2019.
The tower is the second big City building to be put on the market this month, after Brookfield launched an effort to sell CityPoint for £500mn ahead of a loan maturity deadline.
Nuveen previously tried to sell the Can of Ham in 2022 for about £400mn. It has since suffered from the decline in pricing for offices and other commercial properties as a result of high interest rates and the uncertainty over demand because of the rise of hybrid working.
“We now think it is time to go test the market again,” said Nick Deacon, head of offices for Europe at Nuveen Real Estate. “We see core capital starting to return to London.”
According to brokers, CityPoint is likely to attract a more opportunistic buyer given it is older and needs upgrades. The St Mary Axe building, meanwhile, will test the appetite of investors for newer, more “prime” buildings.
The first half of 2024 was the first six-month period since 1999 when no office buildings in the City of London changed hands for more than £100mn, according to data group CoStar.
According to MSCI, office transaction volumes across Europe in the first half, at €18.5bn, were down 25 per cent from the already depressed levels in the same period of 2023. However, the data group said the market was “moving into a recovery phase” and that UK dealmaking would probably rebound faster since it suffered sharper price corrections.
The start of interest rate cuts from large economies’ central banks, including the Bank of England, has helped to encourage the commercial real estate market, where most purchases are financed.
Nuveen wants to sell to raise capital to reinvest in relatively cheap purchases as the market picks up steam.
Several listed UK real estate investors have raised equity recently to go after market opportunities, including logistics group Segro and office developer GPE. British Land is seeking a new investor in its tower at 2 Finsbury Avenue, to help fund further development.
Nuveen said the building was fully let, with a weighted average lease length of nearly nine years. Its tenants include law firm Sidley Austin — which accounts for 30 per cent of the rental income — as well as National Bank of Canada, AIB and Samsung Electronics.
Buyers for such a large City tower have frequently come from east and south-east Asia, particularly investors from Hong Kong or Singapore. The building could also attract private equity buyers, although many US companies have been apprehensive about adding to their office portfolios.
Cushman & Wakefield and Newmark are handling the sale.
