Citigroup tower on the market for buyers offering 'in excess of £1bn'

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The Independent Online

The 42-storey Canary Wharf tower which houses the European headquarters of Citigroup is being put up for sale for more than £1bn, the commercial property agents Jones Lang LaSalle said yesterday.

The skyscraper at 25 Canada Square is the third tallest building in Britain, and was the UK's second-largest ever property transaction when Glenn Maud and Derek Quinlan bought it for £1bn at the height of the property boom in 2007.

The selling agents yesterday stressed the "exceptionally long income" secured by a rental agreement with another 24 years to run and a current annual income of £58m per year – or £47.50 per square foot – set to rise in 2015 and annually thereafter. Prospective purchasers can expect an annual income of nearly £70m within 10 years and more than £100m within two decades, according to JLL.

If the Canada Square deal tops £1.09bn, it will knock HSBC's Docklands headquarters off the top spot in the league of the UK's biggest ever property deals.

Interest is expected from UK real estate investment trusts, insurers and pension funds, as well as the overseas investors who continue to show a marked appetite for London commercial property.

The market has bounced back handsomely since the recession. London was the world's largest commercial property investment market last year, with overall transactions up 34 per cent.

Some 62 per cent of the £5bn-worth of West End deals were with foreign buyers, a proportion that rose to 68 per cent in the City. Landmark deals in 2010 included the Norwegian sovereign wealth fund's £448m purchase of a stake in Regent Street, and Qatar's £1.5bn acquisition of Harrods, the Knightsbridge department store.

The boom is expected to continue this year. JLL estimates that more than £52bn is ready to flood into Britain from overseas, more than 80 per cent of it targeting London.

Mr Maud and Mr Quinlan bought 25 Canada Square from Royal Bank of Scotland for £1bn four years ago, backed by a consortium of banks.

The sale is a consensual move and the money raised will reportedly be used to pay back the debt taken out to buy the tower in 2007.