Morgan Stanley plans sale of ‘Walkie Talkie’ tower stake

Bloomberg

Morgan Stanley’s real estate investing unit plans to sell its stake of almost 12 percent in the London skyscraper known as the Walkie Talkie, according to three people familiar with the plan.
China Investment Corp., which owns a portion of the 20 Fenchurch Street building, is considering bidding for the stake, which is valued at about 120 million pounds ($148 million), one of the people said. CIC has about six weeks to agree a deal with Morgan Stanley before the holding is offered to other potential buyers, the person said, asking not to be identified because the matter is private.
Morgan Stanley’s co-owners have the right to purchase the holding before it hits the open market. As such, the US bank has also notified fellow investors including Canary Wharf Group Plc, Brookfield Property Partners and the Qatar Investment Authority of its plan to sell the stake, the people said.
Investment in central London offices slumped to a five-year low in 2016, falling 29 percent to 13.1 billion pounds as activity slowed around the Brexit vote, Costar Group Inc.
said in a report last month. Investor interest has since revived and Hong Kong-based investor C C Land agreed to buy the London tower known as the Cheesegrater for 1.15 billion pounds, a 26 percent premium to its September valuation, the building’s developers British Land Co. and Oxford Properties Group Inc. said on Wednesday.
Morgan Stanley’s real estate investing unit began weighing a sale of its stake in the Walkie Talkie in April 2016, property magazine Estates Gazette reported at the time. The decision to begin the sales process for the 37-story building was delayed around the time of the UK referendum on membership of the European Union.
Businesses have agreed to pay some of the highest rents in the City of London financial district to occupy space at the tower, which was developed by Land Securities Group Plc and Canary Wharf Group.