Exchange could lose out on £30m in tower sale

Click to follow
The Independent Online

The London Stock Exchange, which is trying to sell its headquarters in Exchange Tower, will have to take about 30 per cent less for the prestigious City location than if it had sold up a few years ago, according to property experts.

The London Stock Exchange, which is trying to sell its headquarters in Exchange Tower, will have to take about 30 per cent less for the prestigious City location than if it had sold up a few years ago, according to property experts.

The LSE is thought to be in talks to sell the building for between £60m and £65m. That compares to a valuation of £93m which the LSE commissioned in 2001 as part of its requirements for becoming a public company. It is moving out of Exchange Tower to take up residence in a new glass and concrete development at Paternoster Square, near St Paul's Cathedral.

Property consultants said that while corporate activity in the City is picking up and institutions are re-hiring staff, rentals on buildings are still quite low. Tim Sketchley, a partner at Cushman & Wakefield, said: "There is more activity than there was 18 months ago and some transactions are being concluded. But we are a long way away from where we were in 2001."

A spokesperson for the exchange said: "The £93m was an existing-use valuation taken around three years ago when the property market was near its peak.

"It is no secret that commercial property prices in the City have decreased since then and this will be reflected in the price the exchange receives for Exchange Tower."

The exchange signed a 25-year lease in 2001 for 220,000 sq ft in Paternoster Square, which will also be inhabited by Goldman Sachs.

Mr Sketchley said that the City property market had not yet started to bounce back from the bottom of its cycle, but that it appeared to be close to that point.

Comments