Cheung Kei Group, the Chinese property group headed up by the owner of Hong Kong’s most expensive mansion, has bought the former London headquarters of Bear Stearns for £270 million.
The group has bought 5 Churchill Place in Canary Wharf from Said Holdings, which was founded by Syrian businessman and philanthropist Wafic Said, according to the Financial Times.
Said stated that while the group is confident about the strength of the London market, it received a compelling offer.
Said bought the building in 2009 from Canary Wharf Group for £208 million. It is still let to JPMorgan, which absorbed Bear Stearns during the financial crisis.
The deal marks Cheung Kei Group’s second acquisition in the area since July, when it bought 20 Canada Square from Brookfield Properties for £410 million. It marked the biggest real estate sale in the city’s key financial district since 2014.
Cheung Kei Group’s chair and founder Chen Hongtian is renaming the 20 Canada Square building as Cheung Kei Centre.
The 12-storey glass tower has 556,000 square feet of office space and 16,679 square feet of space for shops. It is currently home to oil company BP and publisher McGraw Hill International.
Chen, who promised to pay up all the cash within a month of his purchase, bought the building from Canada’s Brookfield Property Partners, beating back rival bids by Sidra Capital of Saudi Arabia, and a venture between Hines and HSBC Alternative Investments.
Property guru Chen, 58, has amassed a fortune of around 18 billion yuan (US$2.7 billion), according to the 2016 Hurun Report.
Last year, he made headlines after buying a 9,212 sq ft mansion at 15 Gough Hill Road at The Peak in Hong Kong for HK$2.1 billion, a record price in the world’s most expensive residential market.
The Canary Wharf deals are a sign that Asian investors still view London’s commercial real estate market in a positive light.
Two-thirds of the total £4.8 billion invested in London offices between July and September came from Asian buyers, according to CBRE figures quoted by the FT. Meanwhile, more than 90% of all commercial property transactions in the city during the period involved investment from overseas.
Analysts have suggested a fall in sterling following Brexit has lured overseas buyers to the UK.
“Most of these types of investment are funded offshore, so the purchase is not subject to China’s capital controls,” Knight Frank’s head of China research David Ji told the South China Morning Post.
He added that as a global financial centre with market depth and liquidity, London’s property assets are still attractive for global investors for its stable return and potential for capital appreciation.
In March, Chongqing property developer CC Land agreed to buy the Leadenhall Building in London for £1.14 billion, making it the largest ever Chinese purchase of British real estate.
In the same month, China Minsheng Investment Corp purchased Societe Generale’s London headquarters for £84.5 million.
DealMakerz thinks the deals are a positive sign for the capital’s commercial property sector, which has endured a bumpy ride since the EU Referendum.
London is clearly still an attractive option for overseas investors, particularly for those based in China who are searching for higher returns amid concerns the renminbi could lose its value at home.