Cannon Place
Hines UK announces that it has agreed upon a £300 million debt package with HSH Nordbank together with a £110 million equity co-investment agreement with Candar Finance SARL, the private vehicle of the principal shareholders of LSE listed Russian property developers PIK, to finance its redevelopment of the office building over the Cannon Street station. A landmark development agreement with Network Rail has also been entered into which will enable the project to take place and thereby transform the station and the surrounding area in the heart of the City of London.

In a deal that bucks the current outlook for commercial space in central London, the scale of financial backing from HSH Nordbank is a massive endorsement for the quality of the scheme backed by a joint venture between two global property players. Claudio Lagemann, Global Head of Real Estate at HSH Nordbank said: "We are very happy to underwrite the financing of this large and complex landmark project for developers of such international renown. Both the real estate concept and the location of the project development have convinced us. To us, London represents one of the key markets for office real estate, which will continue to be marked by keen long-term demand among corporate tenants and international real estate investors."

The redevelopment will create new state-of-the-art offices and retail space in the heart of the financial district, and fund significant improvements to the rail and underground stations, one of London's busiest transport interchanges.

Stephen Musgrave, managing director of Hines UK, said: "We are delighted to be in partnership with one of Europe's leading property developers. The strength of our joint venture has been endorsed by the substantial financial backing from HSH Nordbank, one of the leading providers of real estate finance in Europe.

Musgrave continued: "The investment should be seen as a great vote of confidence in the quality of the scheme we are producing, and in the reputation of Hines UK and its outstanding track record globally for redeveloping major transport hubs."

Kirill Pisarev, president of PIK and joint shareholder in the private investment vehicle Candar Finance SARL, with Yuri Zhukov, chairman of the board of directors at PIK, said: "Hines is a leading global property player and we are already working in partnership with the group elsewhere in Europe. We are delighted to be partnering with Hines in a real estate project that will no doubt create a benchmark for future city developments."

Final agreements have also been signed with Network Rail Infrastructure Limited, for the redevelopment of the Cannon Street Station and development of the air rights above the station. The station will be more accessible for the 27 million people who use it each year, supporting future passenger growth and offering new retail space and relocated ticketing facilities. Hines will invest over £20 million in the improvements to the mainline station. Mick Martin, Network Rail's Director of Commercial Property, said: "This re-development is an important project for Network Rail as it will deliver significant improvements to the station, which on completion will make it less congested, easier to use for passengers, and able to meet the challenges of the 21st century."

The development will also include a major renovation and modernisation of the London Underground ticket hall at Cannon Street station, leading to a new step-free entrance at the corner of Cannon Street and Dowgate Hill.

The 1960s buildings above the station are being demolished to make way for a stylish mixed-use development, designed by Foggo Associates. It will contain over 400,000 sq ft of office space, plus 17,000 sq ft of retail accommodation. A final agreement has also been signed with Laing O'Rourke for the construction of the development, which got under way in the summer and is scheduled for completion in 2010. A spokesman for Laing O'Rourke said: “We are delighted to be working on this significant development project in the heart of London. Laing O’Rourke has worked in partnership with Hines for two years to date, and looks forward to working closely with them and our designers, Foggo Associates, over the next three years to deliver this complex project.”