Buying the Gherkin

Lawyers at Taylor Wessing were recently involved in the complex sale of London's iconic 'Gherkin' tower


How much would you pay for a gherkin? 90p? £1.50? £726 million? That last figure's how much private investors Safra are reported to have paid for the Gherkin tower in London – or 30 St Mary Axe as it's officially known – when the building was sold in late 2014. Safra were guided through their colossal purchase by Taylor Wessing whose real estate, corporate and tax teams all pitched in on the deal.

The Gherkin was completed in 2004, after Swiss Re commissioned its construction for their UK headquarters. Two years later German real estate investment firm IVG Immobilien and home counties-based investment banking company Evans Randall bought the 41-storey tower from the reinsurance giant (who still inhabit the building) for £600 million. The purchase was financed through a multi-currency loan, which included a considerable proportion of Swiss francs.

Unfortunately for the two buyers the Swiss Franc began to rapidly appreciate toward the end of the 2000s. This resulted in progressively swelling repayments and the two firms were soon struggling to pay back their loans. After several years of defaulting on debts the Gherkin was placed into receivership in 2013. Administrators Deloitte decided to put the tower up for sale and a whopping 200 potential buyers signed up to show their interest. Evans Randall purportedly tried to whip up some financing to buy out IVG, repay its debts and regain control of the skyscraper but was unable to stump up enough cash before the sale to Safra was secured.

After the deal was done Taylor Wessing real estate partner Paul Lawrence highlighted the Gherkin's sale as an example of a recent trend among investors, who are increasingly turning away from purchasing high-end residential properties: “High net worth investors are now seeking high quality commercial real estate opportunities with excellent value growth potential,” he said in a press release.

The firm's worked on a number of these kinds of property investments in recent years and while several are still confidential, two are not, so we can tell you about them. First there's the Heron Plaza, best known for housing the tallest building in London's financial district, the Heron Tower. The skyscraper comes complete with a 70,000 litre fish tank in the reception and an external glass lift that will shoot you up the side of the building with such force you'll feel like Charlie in the Glass Elevator. Taylor Wessing advised Heron International on the £97 million sale of Heron Plaza to Singapore-based property investors UOL, who plan to construct a five-star hotel next to the Heron Tower, which will be run through UOL subsidiary Pan Pacific.

Continuing its streak of acting for international investors Taylor Wessing also advised Connecticut-headquartered Cain Hoy on a deal to finance the constroversial redevelopment of the Shell Centre on London's South Bank. The first part of the deal saw Cain Hoy loan £370 million to property developers Almacantar to purchase part of the Shell Centre while the second part involved the negotiation of a £450 million loan by a consortium of banks to finance residential development on the site.