Lack of funding for London’s tallest building means contractor may habve to step in
Contractor Brookfield considered becoming a developer for its own £800m Pinnacle Tower, after months of funding negotiations failed to produce any new finance for the project.
The firm is understood to have offered about £100m to help secure continued construction on the tower, which would be the tallest building in London.
A senior source close to the project said the possibility of putting Brookfield’s money into the Pinnacle had been raised in discussions before Christmas.
However, it is understood to have decided against the move. Khalid Affara, managing director of Arab Investments, the Pinnacle’s developer, said that Brookfield was not investing in the project.
The £100m was a fraction of the £600m sought by Arab Investments from HSBC in July last year.
“When they were talking about it, the amount of equity put up was relatively small, around £100m,” the source said.
The tower, which will contain 970,000ft2 of office space and 30,000ft2 of retail space, is now above ground but needs further funding if it is to hit its 2013 completion date.
Brookfield was signed as the contractor for the Pinnacle in January 2009, for about £575m. Davis Langdon is the QS, Arup the structural engineer, and Kohn Pedersen Fox the architect.
The Australian contractor is just one arm of Brookfield Asset Management, which has over $100bn (£62bn) of assets globally, dealing in development and investment banking as well as construction.
Over the past six months a number of possible backers have emerged from Arab Investments’ funding talks but no firm deal has been agreed.
Brookfield declined to comment.