HSBC pocket £250m

Dec 5 2008 By Andrew Mernin

HSBC today booked a £250m profit after repurchasing its European headquarters in London from a Spanish property firm.

Metrovacesa spent a record £1.1bn on the building 18 months ago but offered to sell it back to the bank at a loss after failing to refinance a loan secured on the 690ft-high Canary Wharf tower.

The Spanish firm was unable to refinance the £810m bridge loan as the credit crunch sent residential and commercial property prices into freefall.

HSBC’s base, known as 8 Canada Square, cost £500m to build and has been the global headquarters of the bank since 2002.

It had been leasing the building, which houses 1.1 million square foot of office space, for up to 25 years and paying an annual rent of £43.5m.

The tower boasts a gym that occupies an entire floor, dining rooms, shops and a medical centre, and scored an ``excellent" rating from the Building Research Establishment environmental standards body.

The bank made the sale as part of plans to exploit the value of its property portfolio - and Metrovacesa bought at the peak of the property bubble.