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Brookfield is in exclusive talks to sell its 36-storey Citypoint tower for around £455M to London-based private equity firm Castleforge.
The value of the 630K SF building is approximately in line with the debt package secured against the property, which includes both commercial mortgage-backed securities and a junior loan facility.
The potential deal would be one of the largest for a London office building since the market corrected and the latest indication that investors are prepared to look at older buildings again because of the shortage of new supply coming online.
Citypoint has a checkered history. It was originally developed for energy giant BP in 1967, but its previous owner lost control following the global financial crisis, and Brookfield originally acquired its debt before buying the property in a deal valuing it at about £561M in 2016.
It refinanced Citypoint in 2018 with £367.5M of CMBS arranged by Morgan Stanley and a £92M junior loan, taking total debt to £460M. JLL valued the building at about £600M at that time.
The landlord attempted to sell the building in 2024, but bids were under the level of the outstanding loans, forcing Brookfield to restructure its debt. The company subsequently secured a three-year extension in exchange for new conditions, including a higher interest rate.
It has since filled vacant space in the building, and while more space is set to become vacant when law firm Simmons & Simmons departs in 2030, rising rents for the limited supply of new office developments available mean there are strong prospects for filling the vacated space at higher rents.
For its part, Castleforge is also currently redeveloping the former London headquarters building of Deutsche Bank at Winchester House on London Wall with Malaysia’s Gamuda. The private equity firm has also agreed to a partnership with New Jersey-based Conversant Capital, which has announced plans to invest as much as £1B in London’s office market.
Brookfield and Castleforge declined to comment on the deal.
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