Landsec – formerly Land Securities – has exchanged contracts for the sale of its 50% stake in 20 Fenchurch Street, otherwise known as the Walkie Talkie, to LKK Health Products Limited (LKK) for a whopping £641.3M. LKK will also acquire Canary Wharf Group’s 50% stake, meaning it will own the building outright, boosting the total headline price to a record-breaking £1.3Bn.
A joint venture development, initially conceived by Landsec and Canary Wharf Group in 2010, 20 Fenchurch Street has housed businesses large and small since its 2014 opening. The Sky Garden – by far the buildings most spectacular feature – currently sits atop the 34-storey structure, giving panoramic views of our nation’s capital.
But while the building’s distinctive shape helped make it a landmark addition to the London skyline, those same contours have scorched car bumpers and funneled strong winds towards passersby below. Since its unveiling, 20 Fenchurch Street has often courted controversy and split opinion – it was the proud recipient of the 2015 Carbuncle Cup, awarded to the year’s ugliest building – though LKK obviously sense the potential.
The family-owned business, which specializes in Chinese sauces, condiments and herbal remedies, is chaired by Hong Kong billionaire, Lee Man Tat. Landsec now expects to receive £634.5M in net proceeds, of which £475M will be divvied up between its shareholders.
Robert Noel, Chief Executive of Landsec, said: “Our decision to sell 20 Fenchurch Street at an exceptional price and return cash to shareholders reflects our disciplined approach to the use of capital. The building has been an immensely successful project for Landsec and our partners. Its development in 2010 was part of Landsec’s major speculative development programme in the capital, which has seen the completion of 3.1 million square feet of office and retail space, thousands of jobs sustained in the construction industry, and considerable improvements to public spaces. This sale crystallises the significant value we have created at 20 Fenchurch Street.
“While we will be returning cash to shareholders as a result of the sale, our gearing will remain unchanged from current levels, ensuring we retain our significant firepower. This will allow us to move quickly to capitalise on opportunities whenever they might arise.”
The deal’s completion is scheduled to take place at the end of August.
Source – UK Construction Online