Spain's Metrovacesa Buys
HSBC's London Headquarters
by Molly Dover
From The Wall Street Journal Online
May 02, 2007
Spain's largest property developer Metrovacesa SA Monday bought the Canary Wharf headquarters of HSBC Holdings PLC for £1.09 billion ($2.17 billion) in the biggest ever single property deal in the United Kingdom, underscoring the continuing strength of the London property investment market.
HSBC, Europe's largest bank by market capitalization, will retain the freehold on the building, but a wholly owned subsidiary of Metrovacesa has taken a 998-year lease on the office tower.
HSBC will lease the building back for 20 years at an annual rent of £43.5 million with an option to extend the lease for a further five years. The bank will continue to use the building, at 8 Canada Square, as its global headquarters, housing 8,000 staff.
The HSBC sale and leaseback follows a similar deal by Swiss Reinsurance Co. which sold and leased back it London headquarters to German property company IVG Immobilien AG and private investment-banking firm Evans Randall for £600 million in February.
Shares of Metrovacesa were down 0.7% to €84.10 in morning trading in Madrid. In London, HSBC shares rose 0.3% to 928.5 pence. Both markets were broadly higher.
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