Sanctions hit 14 Cornhill landlord
Russia’s second-largest lender has fallen behind on rent payments for its City of London offices, leaving its landlord, the Libyan sovereign wealth fund, out of pocket.
VTB Bank, which has an investment banking operation based opposite the Bank of England, has been banned from paying or receiving rent since being hit with sanctions after Russia’s invasion of Ukraine.
The Russian lender is a tenant of 14 Cornhill, EC3, a Grade II listed office block in the Square Mile that was once the headquarters of Lloyds Bank.
Russia’s second-largest lender has fallen behind on rent payments for its City of London offices, leaving its landlord, the Libyan sovereign wealth fund, out of pocket.
VTB Bank, which has an investment banking operation based opposite the Bank of England, has been banned from paying or receiving rent since being hit with sanctions after Russia’s invasion of Ukraine.
The Russian lender is a tenant of 14 Cornhill, EC3, a Grade II listed office block in the Square Mile that was once the headquarters of Lloyds Bank.
The building has been owned by the Libyan Investment Authority since 2008 when the group bought the block from German fund manager IVG for £120m.
In an interesting twist, the LIA is itself subject to some sanctions – asset freezes introduced during the regime of Muammer Gaddafi – according to the Treasury, which said that it could not comment on specific properties when asked if those restrictions covered 14 Cornhill.
The managing agent at 14 Cornhill, James Andrew International, has applied for a licence from the Office of Financial Sanctions Implementation, part of the Treasury, which would allow the LIA to continue receiving rent from VTB.
“[VTB] cannot pay me until we have got this licence, because the banking system will not allow money to move from a Russian bank to a British bank without a licence,” said Jeremy Grey, managing director at James Andrew International.
Grey was confident that a licence could be secured as soon as this week, which would allow VTB and tenants to which it sublets space to pay despite the sanctions.
Talks are said to be taking place between LIA and VTB over ending the lease and transferring the subletters to direct tenants of LIA. The bank took out a 20-year lease on five floors at 14 Cornhill, but VTB has the option of breaking its lease in 2024.
The FT (£)
