STR? How about a tower block in the East End?

Alan_M_2

Ok, well, it's actually the HSBC building in Canary Wharf, sold for £1 Billion then leased back - now that's what I call a STR

Just a snippet from an article on the FT.com website that some of you may find of interest:-

http://www.ft.com/cms/s/96002c68-b862-11db-be2e-0000779e2340.html

Whilst this article is predominantly about commercial property I still thought it might be an interesting read, I'm right in the middle of moving into a new warehouse and you think domestic property is expensive take a look at anything commercial, the rises have been astronomical. I couldn't buy a warehouse I need for less than £1 Million and I don't know many small business that could obtain a mortgage of that size never mind cover it.

manhattan

also, note that the Swiss RE building (gherkin) was also sold this week. Hmmm........ do the owners know whats probably coming and STR'D too?

ManAtHome

The detail of the leaseback deal would be interesting - are they STRing or STLing (Selling to Leg-it)...

Generali

The boss of British Land has been warning about returns on commercial property being only low and has been selling developments (e.g. shopping centre in Slough sold for £20 million below book value).

Alan_M_2

ManAtHome wrote:

The detail of the leaseback deal would be interesting - are they STRing or STLing (Selling to Leg-it)...

Highly unlikely they're leaving it's their UK Headquarters I think.

Alan_M_2

manhattan wrote:

also, note that the Swiss RE building (gherkin) was also sold this week. Hmmm........ do the owners know whats probably coming and STR'D too?

Well that deal looked to me that they were simply realising a profit, over £200 Million from what I read.

Generali

Alan_M wrote:

Well that deal looked to me that they were simply realising a profit, over £200 Million from what I read.

If British Land are correct in what they say and rental yields are 4%, Swiss Re, HSBC and any other company that can make more than 4% on their capital are much better off STR - better for them to release the funds that way than borrow against the building at LIBOR+25bps or whatever.

F_T_Buyer

Alot of Barclays branches have been sold, and let back. Also the same with another bank (can't remember which).

I believe the yield Barclays were paying was just below 5% (from adverts I saw).

It's obvious commercial property is at a high, and due for a fall. Especially if we fall into a recession, as I think we will in the coming years. The same factors apply to residential property (BTL), with one added ingredient - sentiment.

Ho hum. Can't say people weren't warned.

lynzpower

Commercial property is ridiculous at this level.

Its catastrophic for british business, and that alone is why the majority of high streets are dying a death

Generali

The whole property thing in this country is crazy - a house should be somewhere to live not an investment. Massive amounts of money have been pumped into property that should have been invested in productive capacity.

People are crippling themselves financially to buy a property on which they will never be able to realise the capital gain.

ManAtHome

Well they may be having a bit of a think... http://business.scotsman.com/index.cfm?id=1480572006