Morgan Stanley’s real estate arm is to sell its ownership of London’s 'Walkie Talkie' for a figure understood to be around £150 million ($218 million; €192 million) – taking the building’s projected value to £1.3 billion, second only to The Shard (valued at £1.5 billion) in the UK’s capital.
The building was originally solely owned by UK property company Land Securities which in 2010, sold a 50 percent stake to Canary Wharf Group (CWG), which at the time included China Investment Corporation (CIC), MSREI, Brookfield and Qatar Investment Authority (QIA) among its principal shareholders.
CWG, which managed the property, retained a 15 percent stake in the project but sold on three equal portions of 11.7 percent to each of the three main shareholders.
The building’s complex ownership structure took a further twist with the £2.6 billion takeover of CWG last year when QIA and Brookfield bought CIC and MSREI out of the company, taking full ownership of the 15 percent stake – CIC and MSREI, however, retained their original 11.7 percent.
MSREI’s recent decision to sell its share, which was bought on behalf of its open-ended Special Situations Fund III, will give potential investors the opportunity to own a slice of one of Europe’s best known buildings, which generates annual revenue of almost £40 million.
Trouble-maker
The 37-story building situated at 20 Fenchurch Street, a stone’s throw from the Great Fire of London monument in the heart of The City, garnered its catchy nickname because of its highly-distinctive top-heavy shape.
Construction on the structure began in 2009 and was completed in early 2014. Despite its short history, the building already has a reputation for trouble-making.Right from the outset the beleaguered Walkie Talkie has been riddled with wave after wave of controversy, criticism and mockery.
During the property’s planning stage, former Royal Institute of British Architects (RIBA) president George Ferguson described its design as a “child’s concept” and then more bluntly as “ugly”. The ridicule continued when Building Design magazine awarded it the notorious Carbuncle Cup in 2015, as the UK’s worst building.
Construction was supposed to have been completed by 2011, but like many other projects, the global financial crisis nearly killed it off and it was eventually finished three years late.
Then in 2013 it became the subject of global news coverage when the building’s curved exterior began reflecting sunlight on to the streets below, singeing store fronts and in some cases melting cars – it was even possible to fry an egg on the sidewalk below using the refracted light.
The resulting furor led to it being dubbed the “Walkie-Scorchie” and the “Fryscraper”, so in response the developers had to attach a series of sunshades, which cost a reported £10 million, to the building to protect passers-by from the solar glare.
The structure’s unique shape was then blamed for creating a wind tunnel in the surrounding streets which knocked down shop signs and toppled pedestrians – the wind also caused a loud and disconcerting whistling sound in the building’s elevators as they hurtled upwards.
Although home to some heavy hitters in the financial world, such as RSA Group, Tokio Marine, CAN Financial, Liberty Mutual and Kin Group, the top three floors contain the famous Sky Garden, a botanical greenhouse overlooking the whole of London.
With a number of buyers reportedly contesting MSREI’s stake, a recently acquired zero percent vacancy rate and a value that has rocketed 41 percent since March 2015, and 550 percent since construction began seven years ago, the beleaguered building’s future in London’s much-changing skyline can only be brighter than its difficult past.
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