Almost exactly 10 years ago, South African investor Natie Kirsh entered talks to buy Tower 42, London’s first office skyscraper. It was a deal that summed up the post-financial crisis downturn in London property. And for Kirsh, who went where others feared to tread, it has netted him a huge profit.

Tower 42’s value has almost doubled since Kirsh completed the deal to buy the building in December 2011, accounts for the company that owns the building show. Income from the property, which comprises a 320K SF, 42-storey tower and 180K SF of surrounding office buildings, has improved substantially, and Kirsh got his timing just right, buying at the bottom of the market and seeing values roar back.

Tower 42 was previously known as the NatWest Tower and was built as the HQ of the National Westminster Bank. First conceived in 1970 and eventually completed in 1980 at 600 feet tall, it is the first building allowed by the City of London to bypass its historic regulations on tall buildings and paved the way for the cluster of skyscrapers that now dominates the City skyline.

Pension fund managers Hermes Real Estate and BlackRock bought the building from NatWest for £226M in 1998. But by 2010 they wanted to sell. The building had a £138M loan from a consortium of German banks led by Eurohypo secured against it, with a 6% interest rate. The loan expired in December 2011.

While today pension funds use very little debt, in the pre-crash world it was not uncommon for institutional investors to use significant leverage. It might not have been possible to refinance the loan, given that credit for real estate at that time was scarce, and the income on the tower was seen as uncertain because it came from lots of smaller tenants on relatively short leases. So Hermes and BlackRock went to the market.

In 2010, the owners held talks with Hong Kong investor Chinese Estates about a deal to sell the building for £300M, but the deal fell out of bed.

In mid-2011, Kirsh stepped in and paid £282M for Tower 42, a 6.9% yield. That is 200 basis points higher at least than average City of London office yields today.

Kirsh, advised in his property dealings by former Lambert Smith Hampton Chief Executive Philip Lewis, invested £50M in refurbishing the tower and the five smaller buildings that make up Tower 42.

He turned the supposed bug of short leases to smaller companies into a feature, improving the income on the building by appealing to companies looking for small offices on flexible leases. When he bought the building, rental income was £20M, whereas Companies House accounts showed it was £25.4M in 2020, down from £25.9M the year before as a result of retail tenants struggling during the coronavirus pandemic. WeWork leases 56K SF at 15 Bishopsgate, one of the estate’s smaller buildings.

The accounts showed that at the end of 2020, the building was valued at £572M, down from £584M the year before but still more than double the price paid in 2011.

Kirsh turns 90 next year, and the profit on Tower 42 has swelled his fortune, which Forbes estimates at $5.2B. There were rumours in 2018 that Kirsh would put the building up for sale, but he told Estates Gazette, “You would have to be nuts to sell prime freehold real estate in the heart of the City of London.”