Canadian asset manager Brookfield has put Citypoint tower up for sale in what could be the biggest commercial office sale in the capital all year.
Brookfield has reportedly started the sale in the hope of avoiding a default on a £460m loan secured on the building, according to the FT, which it previously extended in January 2023 for a period of 12 months.
The company, which is one of the world’s largest owners of commercial office space, is seeking £500m for the 36-story building, although it was valued at £670m in March last year.
It first bought a stake in the tower for £106m in 2014, and later acquired the full property in 2016. It has since invested £40m in upgrades and boosted occupancy to 82 per cent.
Tenants include Simpson Thatcher and Bartlett as well as Simmons & Simmons.
The commercial property market in London has been hit hard in the past few years after high interest rates caused a hike in borrowing costs and a trend towards working from home reduced the need for large prime spaces.
A test for the commercial market
This makes the sale of Citypoint tower a big test for the market, which has only seen a few transactions over £100m so far this year.
Property giants Great Portland Estates (GPE) and Derwent have both put expensive buildings on the market only to find deals fall through or that they have to pull them from the market after offers fell short of expectations.
Brookfield also co-owns Canary Wharf Group (CWG), which manages office space in Canary Wharf with the Qatar Investment Authority.
CWG is similarly reportedly in talks with third parties to sell a stake in its four underground shopping centres as the banking district’s office portfolio struggles with working from home trends.
Numbers from the second quarter of last year showed that Canary Wharf’s office occupation was just under 85 per cent, down from pre-pandemic levels that were consistently above 90 per cent.
City A.M. has approached Brookfield for comment.