Hong Kong, Feb 5: Global lender HSBC Holdings said on Monday it was considering a proposal to sell

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Hong Kong, Feb 5: Global lender HSBC Holdings said on Monday it was considering a proposal to sell and lease back its group headquarters in London, a deal that could raise just over 1 billion pounds (US$1.97 billion).

Hong Kong-based HSBC spokeswoman Vinh Tran said the bank had no intention to vacate the 45-storey HSBC Tower, or 8 Canada Square, at Canary Wharf, but was looking at a plan to sell it and then rent it back for 15 years.

''Demand for property in the UK is quite good and we're reviewing the matter,'' Vinh said.

''There's a proposal to sell and lease back for 15 years.

Everything is under discussion at the moment and no figures have been confirmed.'' With prime annual rents in Canary Wharf at 45 pounds per square foot and initial yields at 4.25 percent, the 1.1 million-square-foot HSBC Tower could fetch 1.16 billion pounds if sold at prevailing market prices.

The Hong Kong Economic Times quoted reports on Monday that the bank wanted to sell the building for about 1 billion pounds and rent it back at 45 million pounds a year.

The report said property services firm CB Richard Ellis had started to approach private equity and institutional investors for offers for the building.

CB Richard Ellis in Hong Kong declined to comment.

Last year, the London office market saw $17 billion worth of property change hands in more than 400 deals, with the average initial yield across the city falling 75 basis points to 4.25 percent, according to consultants Jones Lang LaSalle.

In the Canary Wharf area, rents jumped 20 percent last year from 2005 as vacancy rates fell to 7.9 percent from around 13 percent at the end of 2004.

Designed by Sir Norman Foster, the 200-metre-high HSBC Tower houses more than 8,000 workers.


Reuters

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