Ten Upper Bank street located in London, England. (Photo by Matt Buck)
Clifford Chance, the 2,525-lawyer global legal giant whose latest financial figures are due next week, didn’t have to look far for its most recent M&A deal of note.
The Magic Circle firm’s London office is advising on one of the city’s largest commercial real estate deals so far this year by handling the proposed sale of a 32-story skyscraper at 10 Upper Bank Street that houses its own headquarters to a Chinese and Qatari consortium.
The $1.4 billion deal announced last week will see Chinese state-backed China Life Insurance Co. take a 70 percent stake in the edifice located in London’s Canary Wharf business district, while Qatar Holdings, a sovereign wealth fund, picks up another 20 percent share in the building. Songbird Estates, a London-based consortium that currently owns Clifford Chance’s home base through its Canary Wharf Group, will retain a 10 percent stake in the property.
Clifford Chance used to to be the sole occupier of the building, according to a report earlier this year by commercial real estate website CoStar, which notes that the firm has been looking to sublease some of its space. News reports and public records state that the building itself generates roughly $75.6 million per year in rent.
Songbird’s current investors include Qatar Holdings, Morgan Stanley, GF Investments and the China Investment Corp. Over the past decade the foursome, each of whom own about a quarter of Canary Wharf, helped build up the neighborhood from a vacant marshland into a legitimate rival to London’s other downtown business center. (Skadden, Arps, Slate, Meagher & Flom is another legal giant whose London operations are based in Canary Wharf.)
But this week, bonds secured by Canary Wharf’s commercial real estate sunk to their lowest value in three years amid concerns that its debt could be bought back for less than market value, according to Bloomberg, which notes that securities will be repaid from proceeds from the pending sale of 10 Upper Bank Street.
The Lawyer, a U.K. legal publication, reports that Deutsche Bank and the Canary Wharf Group are seeking a London court resolution to adjudicate a dispute over the financing being used to sell 10 Upper Bank Street. The deal itself sees Latham & Watkins advising China Life, while Clifford Chance’s Magic Circle rival Freshfields Bruckhaus Deringer has been tapped by Qatar Holdings, according to London-based Legal Week.
Clifford Chance commercial real estate partners Michael Edwards and Damian Perry in London are advising the Canary Wharf Group on the building’s sale. The firm, which has long handled matters related to the development, including getting caught up in litigation during the late 1990s related to its creation, declined to comment about its work advising on the 10 Upper Bank Street deal.
On its website, the firm calls Canary Wharf “one of the best working environments in London,” citing a fitness and wellness center and restaurant, delicatessen and coffee bar as available to employees and visitors alike. Last year the Duchess of Cambridge Kate Middleton attended a charity event at Clifford Chance’s Canary Wharf office, which at times also saw unrelated protests by cleaning workers. In May, a deal sought by Clifford Chance to sublease six floors—or about 22,000 square feet of space—in the building fell through, according to Legal Week.
The Canary Wharf sale wasn’t the only major real estate transaction announced across the pond this week.
Legal Week reports that Magic Circle rival Linklaters is advising Australian property giant Lend Lease Group on the sale of its 30 percent stake in the Bluewater shopping center complex in Kent, a county in southeastern England.
Land Securities Group, a London-based commercial real estate investment trust, is buying the stake in one of the U.K.’s largest shopping malls for approximately $1.1 billion, according to Bloomberg. Nabarro, a midsize British firm, is advising Land Securities on the matter. Adrian de Souza has served as group general counsel for the REIT since late 2010.