Citigroup Tower up for sale for more than 1 bn pounds

LONDON: The Citigroup Tower in London's Canary Wharf business district has been put on the market for more than 1 billion pounds ($1.64 billion), as its owners try to recoup their investment made at the height of Britain's property boom.

In November, a source close to the process told Reuters the owners, property entrepreneurs Glenn Maud and Derek Quinlan, were likely to sell Citibank's European headquarters for about 1 billion pounds after an extended review of their options to refinance.

The tower, which is one of Britain's tallest buildings, was sold in July 2007 to Gardenprime Limited, a joint venture between Maud and Quinlan, for 1 billion pounds at the peak of the debt-fuelled commercial property market.

Property prices fell into a two year slump and UK commercial real estate values dropped 44 percent before hitting a trough in August 2009, data from Investment Property Databank shows.

There are 24 years left on a weighted unexpired lease with sole tenant Citigroup, and the current rental income is 47.50 pounds per square feet, or 57.6 million pounds per year, said real estate broker Jones Lang Lasalle, who has been hired to conduct the sale.

The rent is subject to an uplift in 2015 followed by annual increases, indexed at 3.2 percent, the property agent said.

The buyer can expect the annual income return on the initial investment for the 1.22 million square foot office tower to hit near 70 million pounds within 10 years and over 100 million pounds within 20 years, it said.

Jones Lang LaSalle's City Investment team said it expected to see buyer interest from international markets as well as UK real estate investment trusts (REIT), insurers and annuity funds.