LONDON — A high-profile commercial real estate deal has collapsed after Nuveen, the U.S.-based asset manager, rejected a €386 million offer from Blackstone for one of the City of London’s most recognisable office towers. The 21-storey skyscraper at 70 St Mary Axe — nicknamed the “Can of Ham” due to its distinctive curved, oval shape resembling a tin of processed meat — has now been withdrawn from the market.
Blackstone’s Bid Surpasses Guide Price, But Not Enough
Sources familiar with the deal confirmed that Blackstone offered £330 million (€386 million) for the fully let, 300,000-square-foot property. Tenants include prominent names such as Sidley Austin, Samsung Electronics, and Vattenfall. The bid exceeded Nuveen’s latest valuation of £322 million but fell significantly short of the original £400 million asking price set when the building was discreetly listed in 2022.
Despite strong interest and a competitive bid, Nuveen opted to hold the asset, citing ongoing price dislocation in the London office market and a long-term belief in the asset’s value.
Strategic Withdrawal Amid Market Volatility
The withdrawal comes as London’s commercial real estate sector continues to face headwinds. Office investment volumes hit a two-decade low in 2024, amid rising interest rates, remote work trends, and macroeconomic instability. While demand remains for high-spec, sustainable office space, the valuation gap between buyers and sellers remains a critical barrier.
Nuveen, which manages over $1 trillion in global assets, appears to be signaling confidence in the future recovery of London’s premium office segment. With the “Can of Ham” fully occupied and producing stable income, holding may offer stronger returns than a discounted exit.
Nuveen Bets on Long-Term Value
“Nuveen’s message is clear — they’re not in distress,” said a senior analyst at CBRE familiar with the negotiations, and they believe this building is worth more than the market is currently willing to pay,” said one market insider.
This move reflects a broader trend among institutional owners who are unwilling to offload prime real estate at today’s deflated prices. The bid rejection reinforces the notion that top-tier landlords are taking a wait-and-see approach, anticipating improved market conditions and pricing alignment.
Outlook: More High-Profile Deals Could Stall
The failed sale of 70 St Mary Axe underscores the challenges currently facing major property transactions in London. With sellers holding firm on valuations and buyers demanding discounts, more deals could be postponed or abandoned altogether.
Still, the presence of heavyweight investors like Blackstone suggests that competition for trophy assets will remain fierce. As sentiment improves, further strategic plays are expected from both global private equity groups and long-term institutional holders.
