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Harshil Shah/Wikipedia

Gherkin goes into receivership

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25th Apr 2014
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Partners from Deloitte restructuring services have taken over the distinctive City skyscraper at 30 St Mary Axe in the City of London, better known as the 'Gherkin'.

The building was designed by Lord (Norman) Foster and constructed by insurer Swiss Re on the site of the former Baltic Exchange, which was destroyed by an IRA bomb in 1992.

The German investment company, IVG Immobilien, that led the consortium that acquired the landmark for £630m in 2007, went bankrupt last year after defaulting in 2009.

While the building has been earning rents from tenants including Swiss Re and Sky News, which broadcasts daily City news reports from the tower’s top floors, adverse currency fluctuations between the pound and the Swiss franc have seen the property’s liabilities soar.

With some reluctance, the leading lenders called in Phil Bowers and Neville Kahn of Deloitte as joint fixed charge receivers yesterday.

Kahn commented: “The Gherkin is a truly exceptional building, a landmark recognised around the globe. Our priority is to preserve the value of this asset. We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants.”

Deloitte has some form in this area. In 2011 Kahn and Bowers were part of the restructuring team at Targetfollow Properties that sold the nearby site at 70 St Mary Axe to the Teachers Annuity and Insurance Association for £20m. this is being developed around another distinctive building design, kown as the “Can of Ham”, by Foggo Associates.

With sterling strengthening against other currencies and the possibility of interest rate rises on the horizon, FRP Advisory predicted that other overseas investors in the City could find themselves in similar financial difficulties. “The multi-currency financial arrangements in place at the Gherkin are not uncommon in large prime commercial property investments in and around London, where overseas investors have recently dominated the market,” said FRP Advisory partner Glyn Mummery.

“We expect similar crunch times ahead for overseas investors who have misjudged their currency arrangements for servicing debts on UK property and other assets.”

Replies (3)

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By Rubster
25th Apr 2014 15:37

Wally

Jerkin' the gherkin

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David Winch
By David Winch
25th Apr 2014 16:19

Well . . .

 . . . seems like they are in a pickle!

David

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By carnmores
26th Apr 2014 19:51

you always get indigestion

from a pickle , omerprazole is the answer ............

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