HSBC Buys Back Headquarters at a Profit
HSBC said Friday it has bought back its London headquarters from Spanish real estate company Metrovacesa in an 838 million pounds ($1.2 billion) deal.
HSBC said the deal would add about 250 million pounds to its income in the second half of this year.
In May of last year, HSBC had agreed to sell the 210-meter (689-foot) tower at 8 Canada Square to Metrovacesa for 1.09 billion pounds, the biggest property deal in British history.
Metrovacesa, which was forced to undo the deal because of difficult financial circumstances, said the sale of the building back to HSBC would have a negative impact of euro97.9 million ($124.8 million) on its earnings because of shifts in exchange rates and a decrease in the building's value.
HSBC Holdings shares were down 0.07 percent at 710 pence on the London Stock Exchange.
"Clearly the market has deteriorated significantly since we agreed the sale in spring 2007," said David Hodgkinson, group chief operating officer of HSBC.
"It was important to work with our client, Metrovacesa, to resolve the funding issue which had arisen. 8 Canada Square is a landmark building and this transaction is in the best interests of both parties and HSBC shareholders," Hodgkinson said.