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Gherkin Deal Weighs In at $1.2B

LONDON-Swiss Re is selling the landmark 500,000-sf office building at 30 St. Mary Axe here to locally based Evans Randall and IVG Immobilien for 600 million pounds (US$1.17 billion).

By Brian K. Miller | Updated on February 05, 2007

LONDON-Swiss Re, the Zurich-based reinsurance firm says it has agreed to sell its landmark office building here to an affiliate of the real-estate investment manager IVG Immobilien AG for $1.17 billion. (600 million pounds). Known as the Gherkin due to its design, the 500,000-sf, 41-story building is located at 30 St. Mary Ave. As part of the transaction, Swiss Re will remain the three-year-old building’s principal tenant, occupying 50% of the building through at least 2031. The transaction is expected to close in February.

Given its long-term commitment to the building, Swiss Re CEO Jacques Airgrain says the company selected IVG Immobilien AG due in large part to its track record in managing properties. A number of potential investors showed significant interest in the building, he says. Swiss Re is rated “AA-” by Standard & Poor’s, “Aa2″ by Moody’s and “A+” by A.M. Best.

IVG Immobilien AG is acquiring the Gherkin in a 50-50 joint venture with Evans Randall, a London-based private investment banking firm. Evans Randall stated in its on press release that it is paying 630 million pounds (US $1.24 billion) for the asset, which it says reflects a yield of 4.5%.

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