Blackstone Weighs Sale of Canary Wharf Office Building

Blackstone is again considering offloading a London office property in a part of the city that hasn’t seen a significant deal in the sector since 2021.

The private equity firm is considering putting Cargo at 25 North Colonnade in Canary Wharf on the market early next year, Bloomberg reported. Blackstone purchased the building in 2014 for approximately £165 million ($220 million) before pouring £100 million ($133 million) into upgrades.

Blackstone declined to comment to the publication.

Blackstone tested the market two years ago, but stepped back from the process after buyers couldn’t meet its target price of roughly £270 million ($360 million). This time around, it expects to command even more.

Sentiment in the Financial District has grown more bubbly as the office market has recovered from the pandemic lows.

In Canary Wharf, HSBC is seeking additional space and JPMorgan Chase is considering building the city’s largest office building, spanning more than 2 million square feet, at its Riverside South site. The proposal is not finalized, but should the bank pursue that route, the property would be designed by Foster + Partners.

As of two years ago, Cargo was fully occupied, primarily thanks to BP, CoStar reported at the time. Tenants in the past have included the Financial Conduct Authority, which left in 2018.

Should a sale go down, it would be a benchmark for Canary Wharf, which has not seen an income-producing office building trade since Brookfield purchased 20 Churchill Place in 2021 for £250 million ($308 million).

Blackstone appears to have a seller’s mindset recently regarding prominent office towers across the globe.

Two months ago, Marc Holliday’s SL Green went into contract to buy the Park Avenue Tower in the Plaza District for $730 million. The price tag is a deep discount from the roughly $925 million that Blackstone put into acquiring and renovating the building since 2014.

— Holden Walter-Warner