Vatican Weighs Sale of London Office at Heart of Scandal

The Vatican is considering the sale of a luxury London building embroiled in a financial scandal that drew papal condemnation and a probe into those involved in its purchase seven years ago.

Now authorities of the walled city-state within Rome have invited brokers to pitch for options that include the potential sale of 60 Sloane Avenue in Chelsea, people with knowledge of the process said.

The building is valued at about 200 million pounds ($277 million), the people said, asking not to be identified because the process is private. The property is located in one of the most sought-after and rich zip codes in the capital. The Vatican confirmed that a sale is one of the options on the table, while adding that there was no rush to reach a decision.

Originally developed as a car showroom for the Harrods department store, the building spans more than 170,000 square feet (16,000 square meters) of offices and retail space with a neo-classical terracotta facade. It has permission to be converted into 49 luxury apartments.

Money Loser

Selling the building would rid the Vatican of a toxic asset, as dealings over the building prompted an investigation into the 2014 investment that saw the city-state lose money as several Vatican officials and middlemen were hauled in.

The Vatican’s losses in the deal amount to between 66 million pounds and 150 million pounds, Archbishop Nunzio Galantino, who heads the Administration of the Patrimony of the Holy See which manages real estate holdings, told Catholic newspaper Avvenire last year.

Vatican Weighs Sale of London Office at Heart of Scandal

The Vatican initially bought a stake in the project and later invested further funds to buy it outright with concerns raised about high fees pocketed by middlemen, Italian newspapers have reported.

Galantino said that among the reasons for the losses tied to the building were “mistakes or fraudulent acts” being investigated by the Vatican, as well as high interests on mortgages involving the property, the depreciation of the pound, the economic crisis due to the pandemic, and uncertainty over Brexit.

The controversy collides with the messaging that Pope Francis sought to convey. He once called money “the devil’s dung” and made the clean-up of the Catholic church’s finances a pillar of his papacy.

To drive the point home, he accepted the resignation of Cardinal Angelo Becciu, who previously served as chief of staff in the Vatican’s secretariat of state and has been linked to the property deal.

Becciu, who has not been placed under investigation, has denied any wrongdoing.

©2021 Bloomberg L.P.

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