RBS Sells Citigroup Tower in London for $2 Billion - News

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RBS Sells Citigroup Tower in London for $2 Billion

Topics:Banking | Real Estate

Companies:Barclays PLC

By: Retuers | 02 Jul 2007 | 06:00 AM ET

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A group led by Irish financier Derek Quinlan has bought the 42-storey tower in London's Canary Wharf financial district owned by Royal Bank of Scotland and used by Citigroup as its European headquarters, Quinlan said on Monday.

The transaction price is 1 billion pounds ($2.01 billion), in what would be the second biggest U.K. property deal. It contains 1.2 million square feet of office space.

Quinlan, founder and chairman of Quinlan Private, and property investment firm Propinvest agreed a 50/50 joint venture to buy the property and said it is let under a 25 year lease.

The building is similar in size and structure to HSBC's headquarters sold for 1.1 billion pounds in April in a record U.K. property deal.

Quinlan said in a statement the rental yield is currently about 4.5%, which it said was significantly below the market average for Canary Wharf and the City of London. It said it expects the yield to increase significantly.

RBS is also considering selling another Canary Wharf property, which is occupied by Bank of America and Credit Suisse , which is slightly under half the size of the tower just sold. The two properties were bought together.

RBS is currently leading a consortium trying to buy Dutch rival ABN Amro for about 71 billion euros. The Dutch bank has agreed to a deal with Barclays.

(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

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