The landlord of London's iconic "Can of Ham" building has turned down a higher bid from Blackstone worth around 330 million pounds ($426.92 million) for the property, as Nuveen is optimistic about the growing interest in European real estate assets, according to a source familiar with the situation.

The 21-story structure located at 70 St Mary's Axe is among the scarce high-value office properties put up for sale in Europe recently, following the impact of post-pandemic changes in work patterns and increased borrowing costs on the market.

The sale of the "Can of Ham" building is being closely monitored alongside other European transactions to assess the agreement between buyers and sellers on pricing, as office sale volumes significantly declined last year to the lowest level since 2009.

Negotiations between Blackstone and Nuveen concerning the tower collapsed due to disagreements over the price, the source disclosed anonymously to Reuters.

It was previously reported that Blackstone's 300 million pound offer for the building was rejected last year.

Blackstone and Nuveen have chosen not to comment on the matter.

Although Blackstone's new offer surpassed Nuveen's initial asking price of 322 million pounds set when the tower was first placed on the market last year, Nuveen has raised its expectations subsequently, encouraged by strong leasing activity in London and a resurgence of capital flowing back into European assets.

Nuveen is aiming for a higher valuation and might opt to retain ownership of the property to observe market dynamics. In 2022, it had attempted to sell the building for approximately 400 million pounds.

Investors worldwide are once again showing interest in top-tier office properties from New York to London, as firms are calling employees back to offices and a scarcity of new construction projects poses a risk of supply shortage.

However, there have been limited substantial office property sales in Europe. Brookfield delayed the sale of its London Citypoint tower as bids did not meet expectations, leading to extensions in debt repayment terms, as reported by Reuters in January.

(Conversion rates: $1 = 0.7762 pounds, $1 = 0.7730 pounds)

(Source: Iain Withers; Edited by Tommy Reggiori Wilkes and Jane Merriman)