Real Estate

London’s most expensive tower may sell for $1.7 billion


London's biggest and most expensive office building, global headquarters, is up for sale and could fetch more than £1 billion ($1.68 billion).

The 44-story, 1.1 million square-foot building based in the city's Canary Wharf district is being marketed by estate agents JLL and GM Real Estate.

The two agencies confirmed the sale to CNBC, which was first reported by the Financial Times. Tony McCurley, a partner at GM Real Estate, told CNBC that the grade A building was very high profile.

"We are expecting strong international interest, particularly as the outlook for the real estate market in London is very positive," he said via email.

Dr David James Killock| Flickr Open | Getty Images

The HSBC tower was previously sold at the height of the British property boom in 2007 for £1.09 billion, making it the most expensive building in the capital. HSBC undertook a sale and leaseback at the time—effectively making itself a tenant in its own building—to Spanish property group Metrovacesa.

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According to McCurley, Metrovacesa got into difficulties during the financial crisis, so HSBC bought the building back at a discounted price, before selling it to the National Pension Service of Korea in 2009. The pension fund is now considering a sale.

According to the FT, HSBC has a 13-year lease on the building and is committed to annual upward-only inflation-linked rent reviews. This could make it an attractive proposition for investors seeking a hedge against inflation.

However, HSBC declined to comment when contacted by CNBC.