23 April 2016 – by David Hatcher
Morgan Stanley Real Estate Investing has put its stake in the Walkie Talkie up for sale.
The seller hopes to achieve bids as high as £150m for its 11.7% ownership in 20 Fenchurch Street, EC3, which would reflect a yield close to 3.1% and value the building at £1.3bn.
However, sources close to the other owners of the building valued it at closer to £1bn, which would put MSREI’s stake in the region of £120m, reflecting a 4% yield.
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The sale is an opportunity for investors to own a slice of one of Europe’s best-known trophy buildings and gain exposure to a steady income stream. The building is almost fully let and generates revenue of nearly £40m per year.
The minority interest, however, provides little strategic control.
MSREI’s divestment reflects the success the 37-storey skyscraper has achieved since speculative development began at the bottom of the market in 2011, and is likely to result in it taking a substantial profit.
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