A landmark office building in London’s primary financial district is seeking buyers in Taiwan, as domestic life insurance companies have voiced plans to own commercial properties abroad, international broker Savills Taiwan Ltd (第一太平戴維斯) said yesterday.
The 40-story office block, 30 St Mary Axe, widely known as “The Gherkin,” stands on the former site of the Baltic Exchange shipping market, which was extensively damaged in 1992 by the explosion of a bomb placed by the Irish republican paramilitary group the Provisional IRA.
With a floor space of 47,737m2, the building has an asking price of £650 million (US$1.07 billion), Savills Taiwan managing director Cynthia Chu (朱幸兒) said, adding that her colleagues from London are to meet with potential local buyers.
Cathay Life Insurance Co (國泰人壽), the life insurance arm of Cathay Financial Holding Co (國泰金控), last month paid £310.8 million to acquire a property in London, which it expects to generate about 5 percent in rent yield, higher than the 2.875 percent minimum requirement.
The Gherkin currently has about 20 tenants, including the insurer Swiss Re AG US, which originally owned the building, Savills head of central London investment Stephen Down said.
The office building could generate an equivalent of NT$1.45 billion (US$48.4 million) in rental income a year, Down said, translating into rent rates of NT$8,353 per ping per month.
The rate is much higher than the NT$3,000 to NT$4,000 per ping per month generated by Grade-A office space in Taipei 101.
London attracted 10 percent of total global property funds in the first half of this year, outperforming other cities in the world on the back of a bright economic outlook and capital gains, Chu said.
Taiwanese institutional investors noticed the trend and would not stay on the sidelines much longer, she said.
“More Taiwanese companies are in talks to buy real estate in London and might close the deals very soon,” Chu said.
The Gherkin was constructed by Swedish construction firm Skanska, completed in December 2003 and opened in April 2004. It quickly became a London landmark, featuring in TV programs and films including the 2006 erotic thriller Basic Instinct 2.
The building uses energy-saving methods which allow it to use half the power that a construction of that size typically consumes.
Commercial property deals in London totaled NT$1 trillion last year, increasing 30 percent from a year earlier, with foreign investors contributing 70 percent, Savills Taiwan said.
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