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Wednesday, April 4, 2012

PNB pulls RM1.3bil bid for London property

LONDON: Investment fund Permodalan Nasional Bhd’s (PNB) plan to buy a London office building let to German bank WestLB for £265mil (RM1.3bil) has fallen through at the eleventh hour.

The 350,000 sq ft Woolgate Exchange building in the City of London financial district was put up for sale after the owner of the property Irish investment manager D2 Private failed to pay a £270mil loan last year.

“Following discussions between the receivers and the purchaser, an agreement to sell and purchase the property was not reached,” Capita Asset Services, which is handling the sale, said in a filing to the Irish stock exchange.

PNB, one of an number of cash-rich overseas investors which have stepped up their pursuit of top quality London properties over the past year, entered exclusive talks for the site in February, a source familiar with the situation told Reuters.

D2 Private bought Woolgate Exchange in 2006 for £325mil. Debt financing was provided by Anglo Irish Bank Corp, now Irish Bank Resolution Corp. Credit Suisse bought the senior tranche of the debt and this is now part of a commercial mortgage backed security known as Cornerstone Titan 20061.

Ratings agency Standard & Poor’s, which rates the Cornerstone CMBS, said on Monday that it understood “the borrower (D2 Private) had recently accepted a purchase offer.”

WestLB, once Germany’s third-largest landesbank, is being wound down after it received billions of euros in state aid during the financial crisis, and has been looking for buyers for its businesses before a June 30 break up deadline. Woolgate Exchange is the bank’s London headquarters.

Overseas investors like PNB have been attracted by the UK capital’s safe haven status against an uncertain global economic outlook. PNB has bought three London office properties since the start of the year, two of which were acquired from German fund KanAm for about £570mil.

By Reuters

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