- 1 Minute Read
- 19th September 2013
Investor Dispute May See Heron Tower Sold
A shareholder dispute has today led to the revelation that could see London's Heron Tower sold.
As one of the most iconic office buildings in the City, investors are understood to be unable to reach a decision as to when they can realise the value of their respective investments in the tower.
Ownership is split between property financier Gerald Ronson's firm Heron International and sovereign wealth fund the State General Reserve of Oman, as well as members of the Saudi Royal Family. The trust's investors are allegedly struggling to agree a refinancing deal against weak space lettings.
The dispute reportedly arose from discussions about how to refinance a £315m loan from a group of banks led by commercial financier Wells Fargo.
Securing the refinancing is not thought to be the issue, but rather a failure to reach a consensus exit strategy after months of discussion.
Sale of the property appears to be the most likely outcome at this point.
"It's a boardroom battle between the investors. If the shareholders can't agree between themselves on how to take it forward, and the bank facility needs refinancing, then the bank will need to appoint receivers," said an unnamed source close to the talks.
Chris Spearing, analyst at Numis, said that if investor disputes did result in the tower being put up for sale, he would expect strong investor demand. “Yields on central London projects are falling which suggests a good appetite,” he said.
“The majority of London properties are now being bought by overseas investors.”
Heron Tower's vacancy rate has stood at a steady 40% since opening in 2011. The building was the tallest within the Square Mile, until the under-construction 'Cheesegrater' building became taller.