Canary Wharf tower sold for £1bn

Citigroup's building (far right) follows HSBC's into new hands

The European headquarters of the US banking giant Citigroup in London has been sold for £1bn.

The 42-storey tower in Canary Wharf is being bought from RBS by a consortium involving the Irish financier Derek Quinlan and a private firm, Propinvest.

It is the second of the big towers in the east London development to change hands in recent months.

In April, HSBC sold its headquarters building nearby for £1.1bn, the single largest property deal in the UK.

'Personal investment'

Derek Quinlan, a former tax inspector in Dublin, is best known for the purchase of the Savoy Group in 2004.

His group now has assets in Ireland, the UK, Central Europe and the US.

Speaking about the deal, he said it was a "long-term personal investment in a prime property".

"The quality of this asset is matched by the calibre of its long-term tenant, Citigroup, the world's largest bank," he added.

The Citigroup tower at 25 Canada Square has more than a million square feet of office space.

The new owners said the current rent was significantly below the market average for Canary Wharf and the City in general. They expect the yield to increase significantly.

Mr Quinlan's partner in the purchase, Propinvest, is a London-based private property company set up in 2001.

The Canary Wharf development covers nearly 100 acres of a former dockland site. The first tenants moved in 16 years ago.

About 80,000 people now work in the 24 office blocks and retail outlets on the development.