Financing deal for new City of London commercial property looming

26/07/2010 08:57:24

The City of London commercial property market has moved one step closer to getting yet another tall building following news that a consortium planning to construct it is close to a funding deal.

According to the Independent on Sunday, the US and Middle-Eastern consortium behind plans to develop one of London's tallest skyscrapers, the Pinnacle, is close to sealing an agreement with HSBC to lead the £600 million financing.

Designed by architect Kohn Pedersen Fox, the commercial property is expected to rise 945ft above its base close to the Gherkin in the City and its final development costs will hit £1 billion, the newspaper reported.

This is because £400 million of debt and equity has already gone into the Bishopsgate site, which was acquired in 2008 by Saudi Arabian private wealth management company Sedco.

"With a building of this size, any development finance will require the involvement of several banks," stated the newspaper, which added that "no one bank would want that level of debt on its balance sheet".

City office rents have increased by 25 per cent in the last six months, according to NB Real Estate.

Posted by David Hudek

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