Work on The Pinnacle, a tower set to become the City of London's tallest if it is completed, could soon restart as Saudi Economic and Development Company (Sedco) is in talks to secure a lifeline from its German lender.
According to property sources in the British capital, the Sharia-compliant wealth management organisation headquartered in Jeddah is close to securing a three-year extension to its £140 million (Dh830.6m) loan from the German bank HSH Nordbankthat is due to expire this month.
Work has been delayed for so long on The Pinnacle that Londoners have taken to calling it "the stump" because of its stunted elevation.
Reports in the British press state that Arab Investments, the development manager, is on the verge of agreeing the extension to the loan, which has already been extended twice since it was originally made in 2007.
The deal would provide a much-needed boost for the beleaguered project likened by some in the London market to a "helter skelter" slide that has struggled during the downturn to secure development funding.
Work on the scheme was suspended in January at the seventh floor of the proposed 63-storey, 288-metre high tower, as Sedco struggled to find the £800m needed to build the 1 million square foot building. Sedco represents the interests of more than 60 Arab investors and owns the building with Pramerica, which has a 23 per cent stake.
The contractor Brookfield Construction has now vacated the site in London's Bishopsgate and removed its signage. Last month it brought a £16m legal claim against the tower's legal owners for unpaid construction fees.
The lettings agents Savills and CBRE are required to find a pre-let of about 350,000 sq ft in order to provide funding to allow construction to resume.
"If this deal with Nordbank does go ahead, it would be a boost to London in terms of being a business city," said James Roberts, the head of commercial research at Knight Frank, the property agent.
"But the problem with The Pinnacle is that although the City is not suffering from a fall in demand to the same extent that it did in 2008 and 2009, the demand that is coming is mostly from technology and media companies which are looking for much smaller and cheaper space than The Pinnacle can offer."
Both Sedco and Arab Investments were unavailable to comment when contacted by The National.
