HSBC sells UK headquarters to South Korean fund for $1.29 billion

HSBC, Europe's largest bank, plans to sell its headquarters to South Korea's National Pension Service (NPS) for £772.5 million ($1.29 billion) in cash, less than a year after reacquiring the building from Spain's Metrovacesa SA.

As a result of the sale, HSBC stands to profit approximately £350 million and the transaction is expected to be completed before 31 December 2009, said the bank in a statement.

Following the sale, HSBC will remain at 8 Canada Square also known as HSBC Tower in the Canary Wharf financial district by taking a leaseback on the premises for the remaining 17.5 years of the existing 20 year leaseback period at a current rent of £46 million per annum.

In May 2007, HSBC sold the tower to Spanish property company Metrovacesa for £1.09 billion, making it be the first building in Britain to be sold for more than £1 billion.

However, in December 2008, HSBC bought its headquarters back along with the lease for £838 million to post a profit of £250 million in just 20 months.

Last month, the bank also sold its New York headquarters on Fifth Avenue for $330 million and plans to sell its office located on the Champs Elysees in Paris

Ken Harvey, HSBC's chief technology and services officer, said, "We actively manage our global real estate portfolio in accordance with the needs of our businesses and in the interests of our shareholders, and we are delighted the National Pension Service of Korea, one of Asia's largest sovereign investors, will be our new landlord."

8 Canada Square was designed by Sir Norman Foster's team of architects and construction began in 1999 and the 656 ft high tower with 42 floors was completed in 2002. It is the joint second tallest in the UKalong with the Citigroup Centre.

NPS, through a wholly-owned subsidiary, NPS 8CS Holdings Sarl, will purchase HSBC's 100 per cent shareholding in Project Maple II B.V., the sole asset of which is the 998-year leasehold interest in 8 Canada Square.