A Hong-Kong based firm is in the process of buying London’s ‘Cheesegrater’ building for a staggering £1.1Billion.
The company, CC Land Holdings, is run by property DealMaker Cheung Chung-kiu and the purchase is being touted as yet another example of foreign dominance of the London landscape. The huge deal is likely to be the biggest property deal in the UK since the sale of the HSBC building in 2014, as well as being the largest ever Chinese purchase on UK soil.
Officially named the Leadenhall, the slanted wedge shape of the iconic build was cleverly designed to not block the famous London sightline of St. Pauls Cathedral from the west.
Both parties stand to make a chunky profit on the deal when it’s finalised.
Tim Roberts, Head of Offices and Residential at British Land said, “British Land and Oxford Properties took a bold step at the early stages of the UK’s economic recovery to develop the Leadenhall Building to generate a high-quality, long-term income stream. It’s a decision which has really paid off.”
China’s CC Land Holdings are no strangers to the London property market – in January this year the wildly ambitious firm acquired the Vodafone Paddington office for a cool £290 million. The most recent purchase is another strategic move; the Cheesegrater is well known for it’s impressive (and record breakingly high) rental income and is currently fully occupied for both its office and retail space.
Peter Lam How-mun, Deputy Chairman of CC Land Holdings said, “The Leadenhall Building is a world class skyscraper and office tower boasting an impressive lease portfolio, commanding strong recurring rentals and will be held by the group as an investment property for long term capital growth.”
CC Land reportedly fought off stiff competition from other international investors for the Cheesegrater, but it was the strong commercial ties China holds with Britain that tilted the deal in their favour. Last year China’s Greenland Group pumped £800million into a new residential tower in Canary Wharf and it appears that CC Land are also prepared to break property records in order to secure precious London assets.
David Ji, Head of Research for China at property consultancy Knight Frank, explained that, “given Britain has good relations with China, London’s unique position as a financial centre and a cheap pound after the Brexit vote, the city’s office buildings look very attractive for Chinese investors.”
The influx of Chinese investment in London’s property market seems to be entirely unaffected by Brexit, or any global political risks. The resulting currency depreciation of the shock Brexit vote may be one of the driving forces in the continuation of such huge investment into the Capital.
DMZ would advise investors to keep one eye on the recent capital restrictions in China – as of January 1st this year Chinese banks required customers purchasing foreign currency to specify how they will use the funds, while reminding them individuals are not allowed to invest in overseas property under the capital account.
However, the ongoing lacklustre performance of Sterling puts all British assets on watch. American, Middle-Eastern and Chinese investors are reportedly in ‘gazumping wars’ with each other over London’s largest property assets, taking advantage of a GBP that is at a 10-year low. DMZ says – if you’re a developer, leverage your foreign offers as there is no better time for inward investment into London than today!