Blackstone’s purchase of the ‘Can of Ham’ skyscraper in London failed

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Blackstone’s around £300m bid to buy London’s “Can of Ham” skyscraper has failed, the latest sign that big-ticket office sales remain stalled due to disagreements about the value of the building.

According to people familiar with the process, the American group, the world’s largest commercial real estate investor, has been in exclusive negotiations to buy the building with an offer of just over £300 million. But seller Nuveen is unwilling to accept an offer below the asking price of £322m.

The collapse of the talks, first reported by Green Street News, has stalled London’s biggest office deal for two years.

slatThe willingness to bid for a large, top-quality office building is nonetheless a positive sign for the office market after two years of struggle. According to MSCI, investment in London offices in the first nine months of the year was the lowest since 2003.

But the price offered by the US group is lower than the price at which many owners are still valuing their towers. Nuveen has sought to improve its asking price, one person said.

The two investors’ price impasse shows that neither buyers nor sellers are willing to compromise far enough to break the deal drought.

“There is a difference in price expectations between buyers and sellers. . . shows there is more work to be done before market liquidity returns,” MSCI analyst Tom Leahy wrote in a note.

Blackstone and Nuveen declined to comment.

Office vacancy rates have increased in major cities following the outbreak COVID-19 The pandemic and surge in activity combined, hitting a 20-year high of about 10% in London, according to data from CoStar.

Corporate demand for office space is sharply divided, with competition for the best space with modern amenities and green credentials, but little interest in older buildings or location. bad.

The Can of Ham at 70 St Mary Ax – named for its distinctive round shape – was seen as an experiment in the demand for good quality buildings. It is fully leased with long average lease terms to tenants including law firm Sidley Austin, National Bank of Canada and Samsung Electronics.

Nuveen, the asset management arm of US retirement provider TIAA, was the original developer of the 21-storey tower, completed in 2019. Previously, the tower had been attempted to be sold in 2022 for about £400 million.