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HSBC buys back HQ at a £250m discount
05.12.08
The economic downturn today enabled HSBC to buy back its headquarters building in Canary Wharf at a discount of £250 million to the price it sold the building for last year.
In May 2007 the banking giant sold 8 Canada Square to Spanish property developer Metrovacesa for £1.09 billion under a deal in which HSBC leased the building back for 20 years.
However, the credit crunch has meant the financing of that deal ran into trouble, forcing Metrovacesa into a fire sale.
The transaction, which at the time was London's most expensive property deal ever, was mainly funded by means of an £800 million loan from HSBC to Metrovacesa.
That loan was made subject to the Spaniards refinancing it now.
But the collapse in property values meant Metrovacesa was unable to find lenders prepared to take on the HSBC loan, so it was forced to sell the building back at a massive loss.
HSBC chief operating officer David Hodgkinson said: "Clearly the market has deteriorated significantly since we agreed the sale in spring 2007."
