LONDON (Bloomberg) — HSBC Holdings Plc is in talks to buy back its London headquarters from Metrovacesa SA as the Spanish developer's £800 million ($1.2 billion) loan on the property came due yesterday, three people with knowledge of the matter said.

HSBC sold the 45-storey tower in London's Canary Wharf financial district to Metrovacesa in April 2007 for £1.09 billion. Madrid-based Metrovacesa hasn't refinanced, according to the people, who declined to be named because they aren't authorised to speak publicly. Negotiations on the price remain open, two of the people said.

Central London commercial-property values have dropped about 32 percent since Metrovacesa's purchase, according to Investment Property Databank Ltd. The acquisition, at the peak of the UK real-estate boom, set a record as the city's most expensive single property transaction.

"The deadline for refinancing the bridge loan is nearly up and HSBC is evaluating its options," said Brendon McNamara, a spokesman for the bank. Ursula Guerra, a spokeswoman for Metrovacesa, said the company is continuing to negotiate with HSBC.

The drop in the building's value discouraged Metrovacesa's lenders from providing additional credit to enable the company to keep the property, according to Guillermo Escribano, a fund manager at Metagestion SGIIC SA in Madrid that oversees 200 million euros.

"The bank's taking control of the company would have to provision for the loss in value of the tower on their own balance sheets in the event Metrovacesa kept the tower," Escribano said yesterday by telephone.