(Bloomberg) — The London tower known as the Gherkin is being bought by the Safra Group, the banking empire controlled by billionaire Joseph Safra. The price is about 726 million pounds ($1.2 billion), a person with knowledge of the deal said.
The Safra Group agreed to acquire the 180-meter (590-foot) building, the second-tallest in the City of London financial district, from receiver Deloitte LLP, according to a statement today. The price is equivalent to a yield of about 3.8%, said the person, who asked not to be identified because the information is private.
The tower at 30 St. Mary Axe has become one of London's best-known landmarks since it opened a decade ago. Deloitte was hired by the building's lenders to sell the property in July to end years of defaults. The largest tenants include reinsurer Swiss Re Ltd. and Kirkland & Ellis LLP, a U.S. law firm, according to the statement.
"There aren't many big-lot sized buildings that come up in London, so when they do, you see a lot of competition," Simon Mallinson, executive managing director at property-research firm Real Capital Analytics, said by phone.
Debt Repayments
A fund managed by IVG Immobilien AG, once Germany's biggest real estate company, and London-based Evans Randall Ltd. bought the Gherkin from reinsurer Swiss Re for 600 million pounds ($954 million) in 2007. Deloitte took control of the building in April after the Swiss franc's appreciation caused some of the debt payments to balloon. Receivership is similar to U.S. bankruptcy protection.
"While only ten years old, this building is already a London icon that is distinguished from others in the market, with excellent value growth potential," Safra Group said in the statement.
Joseph Safra, Brazil's second-richest man, has an estimated net worth of $12.2 billion, according to the Bloomberg Billionaires Index. Safra Group and Brazil's Cutrale Group last month agreed to buy banana producer Chiquita Brands International Inc. for about $681 million.
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