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Saturday 23 August 2014

Receivership on the menu for London's famous Gherkin

Peter Flanagan Commercial Property Editor

Published 25/04/2014 | 02:30

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London's Gherkin

IT is one of the most recognisable buildings on London's skyline, but that hasn't stopped the Gherkin falling into receivership.

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Phil Bowers and Neville Kahn of Deloitte were yesterday appointed as receivers over the city skyscraper, officially known as 30 St Mary's Axe, or the Swiss Re Building.

The Gherkin is jointly owned by Evans Randall and IVG Immobilien, which bought the building in 2006 for £630m (€765m).

Despite the buoyant property market in London, the Gherkin has been struggling under the structure of the financing behind the building, particularly on the IVG side.

Last year, CBRE was brought in to restructure the debt secured against the IVG stake and bring in new equity. By then the value of the tower had slumped to between £470m and £530m, putting the IVG's loans in breach of its covenants. Five German banks are thought to have financed the IVG deal.

Symbol

The Gherkin was designed for reinsurer Swiss Re by Lord Norman Foster, the architect behind the new Wembley Stadium and the Millennium Bridge in London. The building is still the headquarters of Swiss Re, which sold the property to IVG after it opened.

The 515,000 sq ft building became a symbol of London almost overnight. But the shape of the floorplates – which are smaller on lower and upper floors – has made it difficult to lease.

Irish Independent

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