Looks like this
WILL be built after all!
From today's Property Week -
Heron on brink of funding coup for £500m tower
and £95m Barcelona leisure sale
24.11.2006
By Laura Chesters, Deirdre Hipwell, Daniel Thomas
Gerald Ronson’s Heron International is poised to seal a double international investment triumph.
In London, Heron has secured equity funding for the £500m, ‘six-star’ Heron Tower in the City from the State of Oman and corporate clients of Strategic Real Estate Investors.
The developer has also agreed a deal with Australian investment firm Babcock & Brown to sell Heron City in Barcelona, its flagship leisure and retail scheme, for around €140m (£95m).
At the Heron tower in the City, Heron is expected to invest £44m of its own money and has secured debt finance.
It had been in talks with three other global institutions but chose the State of Oman and clients of StratReal.
The funding and the debt package for the 451,474 sq ft (41,943 sq m) development is a coup for Ronson and Heron. Sceptics had suggested that it would struggle to get the tower off the ground. However, it will now be built to coincide with a strong forecast leasing market towards the end of the decade.
The oil-rich gulf state of Oman made its largest UK property purchase a year ago when it bought Hines’ 99 Queen Victoria Street office building for £65m. Hines’ then UK chief Philip Lewis is now a director at Heron.
The Heron tower will be funded through the Heron Tower Jersey Property Unit Trust, an offshore limited partnership in which the parties will hold equity stakes.
In Barcelona, Heron City is a three-storey amphitheatre-style scheme comprising 301,390 sq ft (28,000 sq m) of leisure and 64,585 sq ft (6,000 sq m) of factory outlet space. It is on the Meridiana – an arterial road passing through Barcelona.
The scheme is likely to be bought by the new Babcock & Brown GPT European Retail Fund, which launched a €400m (£270m) equity-raising campaign this week (finance, p23). Heron City is anchored by a 16-screen Cinesa Cinema. The annual rental income is €7.5m (£5m). It is thought that the Barcelona deal may be the first of other Heron City sales.
Postscript:
Land Securities is to begin looking for funding this week for its landmark ‘walkie-talkie’ tower development at 20 Fenchurch Street in the City of London. The company has not made a decision as to whether it will go it alone, but BH2 has been appointed to seek interest from possible partners.
