Investors add £130m to arab investments' coffers for 1m sq ft city tower.
pinnacle funding exceeds one-third
Report by James Buckley - Estates Gazette 24th January 2009
Arab Investments has secured more than one-third of the finance it needs for the speculative building of one of the City's tallest towers.
Khalid Affara's company this week obtained £130m from a 60-strong consortium of investors backing the 945ft Pinnacle tower, EC2, taking its total pool of cash to £330m.
Arab Investments already has £200m, including debt from HSH Nordbank, to buy and prepare the site for development. The 1m sq ft Bishopsgate scheme will cost £800m to build.
Half of the latest cash injection has come from Pramerica, the US investment arm of Prudential, and a raft of Middle Eastern investment companies including WAFRA, AREF, NBK and SEDCO. The remainder has been drawn from private investors.
Affara said; "There is the option of sourcing most of the development finance from our Middle Eastern backers, and the £130m cash injection moves us closer to this."
He added that 25% of the KPF-designed skyscraper, by floorspace and income, had now been prelet.
Affara confirmed that law firm Davies Arnold Cooper had agreed to take 100,000 sq ft, paying around £65 per sq ft, as revealed by Estates Gazette (30 August 2008, p23). The solicitor will relocate from its existing 50,000 sq ft office at Tudor Court, EC4.
Serviced office provider Regus will also take 80,000 sq ft over four floors, paying as much as £85 sq ft. The ground-floor shops, totalling 27,000 sq ft, have been let to Eat, Costa and sushi chain Wasabi.
At the end of last year, Arab Investments signed a £575m fixed-price construction contract with Canadian firm Brookfield, signalling that building work on the cheme would start soon. Completion is scheduled for early 2012.