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Business News

In a pickle: The Gherkin to be auctioned off as receivers called in


London’s Gherkin skyscraper is set to be auctioned off later this year after lenders appointed receivers to the iconic City building today.

The tower, formally known as 30 St Mary’s Axe, was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it for £630 million from original owner Swiss Re at the top of the market in 2007.

But the financial crisis sent its value plunging and the buyers defaulted on a £400 million loan from a five-bank consortium in 2009. Part of the loan was also made in Swiss francs, increasing the burden on the borrowers as the currency soared against the pound.

But recovering property markets and huge demand for assets in the capital have boosted sale prospects for the Gherkin, prompting lenders to bring in Deloitte as receivers. It is understood a sale is likely within months.

One senior property source put the value of the Gherkin at close to £600 million and said it would attract interest from a host of international and domestic buyers. He said: “This is a trophy product. Values for prime assets are approaching the levels we saw at the peak of the market.”

Potential buyers include Chinese insurer Ping An, which bought the Lloyd’s Building for £260 million last year.

The Gherkin was commissioned by Swiss Re to replace the Baltic Exchange, damaged by an IRA bomb in 1992. Architects Foster and Partners designed the building, which would become one of the design companies most famous creations.

Work on the construction began in 2001 and the Gherkin opened three years later, with more than 76,500 square metres of commercial space including a club on the top floor with panoramic views.