Arab Investments puts construction of skyscraper in City of London on hold due to lack of development finance
Construction of what would be the tallest tower in the City of London has stalled once again over funding concerns, the developer has confirmed.
A spokesman for Arab Investments, the developer of the 64-storey skyscraper, confirmed that work on site ceased this month, with the developer struggling to source development finance for the project.
The contractor Brookfield had resumed building work on the 288m tower late last year after it had stalled as Arab Investments tried to secure the next stage of funding for the £1bn scheme.
The developer agreed a deal that included a £500m debt facility from a group of lenders including HSBC and HSH Nordbank, plus the injection of new equity from Saudi Arabia-based investor consortium Sedco.
But the deal was reliant on the developer pre-letting a large part of the tower to lower the scheme’s risk, which it has not yet done.
When completed the tower will include more than 90,000 sq m of office space and 2,500 sq m of retail units on the ground floor.
The Arab Investments spokesman said the developer still faced the “same problems as last year”.
“They still need a pre-let in order to unlock the development finance,” the spokesman said.
He could not say how long the project would be on hold.
”It could be two months, it could be longer - there is no time frame yet,” he said.