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Columbus Tower Site Sold

Columbus Tower, the 237 metre tall approved skyscraper next to Canary Wharf has been sold by its owners for 25 million. The tower which has a mixture of offices, a hotel and serviced luxury apartments was originally proposed back in early 2003 and hit serious opposition early on thanks to its location that dissected possible flight paths between it and City Airport in the east.

These objections were eventually overcome and the project was given approval in 2004 by Tower Hamlets council. There were pronouncements from Songbird PLC who own the Canary Wharf estate that they had been told it would definitely progress in 2005 and begin construction. The developer SKMC even went as far as signing the S106 which was worth 4.755 million.

No sooner had this happened than the development was immediately hit by a further set back with the growing realisation by investors in the scheme that Crossrail would go directly under the tower and that work on the tower would be unlikely to begin until the issue had been resolved which involved a substantial redesign of the base and foundations to take into account the proposed tunnel underneath.

The sale to Commercial Estates Group does not however suggest the death of the project. The selling on of projects to other developers who intend to build is common as the experiences of 44 Hopton Street showed earlier this year. Indeed the head of CEG, Jonathan Kenny commented on the future of the tower that, "given we have only owned it for the past week, it is fairly hard to say. We are reviewing what we have bought."

It does leave a big question mark over the state of the current project and whether it will ever progress to completion, if CEG were serious in building what is already approved they would have made their mind up. There is also the question of them ever being able to finance it given the size of the scheme compared to their company value that holds properties of 522 million. Building a 260 million project such as Columbus would be a larger demand of capital than they are to be expected to afford.

Having paid 25 million CEG are unlikely to keep Hertsmere House on the site and will redevelop it into something given their previous history in purchasing sites that have development potential - the big question now is just what will replace Hertsmere House.

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