Oman to buy Allen & Overy LLP building in Bishops Square

By Chris Bourke

April 24 (Bloomberg) -- Hammerson Plc, the U.K.’s third- largest real estate investment trust, is in talks to sell the London headquarters of law firm Allen & Overy LLP to the Oman government, two people familiar with the negotiations said.

The Persian Gulf state is the only bidder in discussions to buy the building at Bishops Square in the City of London financial district, according to the people, who declined to be identified because the talks are private. Bishops Square is Hammerson’s biggest asset, valued by the company at 489 million pounds ($719 million) at the end of December.

Hammerson is trying to raise capital to reduce debt and avoid violating loan terms after U.K. commercial property values slumped. The company raised 584 million pounds in February by selling new shares and is also trying to sell a Paris office building.

There is 400 million pounds of debt secured against Bishops Square, which is likely to be assumed by any buyer. The building has space of 76,500 square meters (823,439 square feet).
Jones Lang LaSalle Inc. is advising the government of Oman.

Andrea Cockram, a spokeswoman for Hammerson, didn’t return a call seeking comment.

The State of Oman bought a stake in the Heron Tower development last year. The 41-story skyscraper is due be completed in 2010 and will be the third-tallest building in the city’s main financial district.

To contact the reporters on this story: Chris Bourke in London at cbourke4@bloomberg.net. Last Updated: April 24, 2009 13:01 EDT