By Iain Withers
LONDON (Reuters) – Brookfield has delayed the sale of its Citypoint tower in London after bids fell short, forcing the property manager to extend debt repayments, a source familiar with the matter said, the latest sign of strain on Britain’s battered office market.
Canadian investor Brookfield had been seeking around 500 million pounds ($620 million) for the 36-storey office tower, but bids came in below 400 million pounds, prompting the owner to pause the sales process, the source told Reuters.
While there is no live sales process for Citypoint currently, Brookfield may decide to try to sell the property again if market appetite improves, the source added.
Creditors have given Brookfield another three months to repay loans that back the Citypoint tower, delaying the deadline to April 20, according to a regulatory filing published on Thursday.
Debts secured against the building total around 460 million pounds, according to credit rating agency Morningstar DBRS.
“We haven’t made any decisions yet and we continue to have a number of options available to us,” a spokesperson for Brookfield said.
The planned sale of Citypoint has been seen as a major test of demand for office property that has been hit by changing working habits and a shift to greener buildings.
Morningstar DBRS last month downgraded credit ratings on several of the loans secured against Citypoint, citing the challenges of selling the property on time prior to the original January deadline and of meeting the seller’s valuation expectations.
Brookfield’s 500 million pounds asking price for Citypoint had compared with its most recent formal valuation of 670 million pounds, and the 560 million-pound price tag when Brookfield acquired it in 2016, according to CoStar.
Built in 1967 to house the headquarters of BP, Citypoint underwent major renovation in 2000 and 2021.
($1 = 0.8059 pounds)
(Reporting by Iain Withers; Editing by Elisa Martinuzzi and Alison Williams)
