Investor clash may spark sale of Heron Tower

 
Suzie Neuwirth
ONE OF London’s tallest buildings is at the centre of a shareholder battle that may result in the property being put up for sale.

Investors in the Heron Tower on Bishopsgate are understood to be unable to reach an agreement over when they can realise the value from their investments.

Property magnate Gerald Ronson’s firm Heron International owns the Tower, along with sovereign wealth fund the State General Reserve of Oman and members of the Saudi Royal Family.

It is thought that the dispute arose from discussions about how to refinance a £315m loan from a group of banks led by Wells Fargo.

While securing the refinancing is not thought to be a problem, shareholders are failing to agree on exit strategies after months of discussions. A sale of the property appears to be the most likely outcome at this point.

A number of lenders have offered to refinance the debt, with real estate investment firm Starwood Capital reportedly offering to provide almost £300m of the debt needed.

Chris Spearing, analyst at Numis, told City A.M. that if investor disputes did result in the tower being put up for sale, he would expect strong investor demand. “Yields on central London projects are falling which suggests a good appetite,” he said.

“The majority of London properties are now being bought by overseas investors.”

Since opening in 2011, the Heron Tower has rented out 60 per cent of its available space.

The building was the tallest tower in the Square Mile until the summer, when the under-construction Cheesegrater became taller – not counting the Heron Tower’s 28m mast. All parties declined to comment.