Irish financier Derek Quinlan will make a personal investment of more than €700 million to acquire half of a 42-storey Citigroup building in London's docklands. The deal is the second-largest single property transaction in Britain.
Mr Quinlan will co-own the skyscraper at 25 Canada Square with Glenn Maud, a little-known British private investor whose company, Propinvest, has a portfolio worth €4.44 billion. They have agreed to spend about £1 billion (€1.48 billion) on a 50:50 basis to buy the office block in the Canary Wharf business district from Royal Bank of Scotland.
The building is occupied under a 25-year lease by Citigroup, the world's biggest bank. The price tag was second only to the £1.09 billion valuation on a tower block nearby at 8 Canada Square, which was acquired by Spanish group Metrovacesa from HSBC bank last May. Mr Quinlan and Mr Maud are believed to have been under-bidders in that transaction.
Mr Quinlan is well known for orchestrating the takeover by a syndicate of Irish investors of the Savoy Hotel group in London in 2004 but he entered this deal on his own. "This is a long-term personal investment in a prime property in the heart of London's new financial centre. The quality of this asset is matched by the calibre of its long-term tenant, Citigroup," he said.
He was a tax inspector before he set up Quinlan Private, an investment firm which has €10 million in assets under management.
He will borrow most of the cost of buying his share of the building but a spokesman would not say how much of his own money he is investing upfront. "The debt-equity split reflects the quality of the investment and the tenant," he said.
While annual rent on the 1.22 million sq ft building is believed to be about £47 million, Citigroup's lease has no break option and is subject to upward-only rent reviews every five years. The yield on the property - rental income as a percentage of the purchase price - now stands at 4.5 per cent.
He is not the first Irish investor in Canary Wharf. Dublin solicitor Brian O'Donnell and his wife Dr Mary Patricia O'Donnell spent £250 million in 2005 on two office blocks at Westferry Circus and Columbus Courtyard in the docklands.
