A Hong Kong-based property developer has won approval to build a 56-storey office tower on Leadenhall Street, set to be the City of London’s third-tallest skyscraper.
Peter Lam’s Lai Sun Group bought a pair of existing properties in 2014 and 2015, and has now been given planning consent to redevelop them into a 263 metre-tall tower.
Dubbed “The Diamond”, the new Skidmore, Owings & Merrill-designed tower will add 102,000 square metres of office space to a growing cluster of skyscrapers in London’s traditional business district, according to Mingtiandi.
“Lai Sun has been present in London since 2010 and is committed to its long term development,” said Lai Sun Development’s deputy chairman Chew Fook Aun. “The City, as the world’s pre-eminent financial capital, has a continuing need for ‘best in class’ office, retail and public space and this investment is a reflection of our confidence in the City’s future as the world’s financial centre.”
The deal marks the latest commitment by a Chinese investor to London’s office market.
Within the first six months of this year, CK Asset Holdings purchased the UBS headquarters in London from GIC and British Land for £1 billion, privately-held rival Nan Fung paid a reported £270 million to purchase the Regent Quarter office complex in north London from ADIA, and mainland developer Beijing Zhaotai Group bought 45 Cannon Street in the City for £145 million.
The Diamond will rise next to the Cheesegrater, a 225-metre tall tower which now belongs to Lai Sun’s Hong Kong-listed rival, CC Land, after the developer bought the London landmark from British Land and Oxford Properties for £1.15 billion in the first quarter of 2017.
“I’m delighted that we have approved the latest addition to the City’s growing office district,” said Chris Hayward, chairman of the City of London Corporation’s Planning and Transportation Committee.
Together with a group of seven other tall towers planned for the area, the Diamond forms part of what has been dubbed the “eastern cluster”.
Lai Sun Development acquired 100 Leadenhall Street, a 125,000 square foot office building in the City of London, for £107 million in January 2015. The low-rise commercial building is located adjacent to Bankside House, a property at 107-112 Leadenhall Street that Lai Sun acquired from RBS in April 2014 for £60 million.
The group’s acquisition of a pair of properties next to 30 St Mary’s Axe, and opposite the planned Scalpel Tower, had already raised the expectation that Lai Sun would undertake a new project on the site.
Lai Sun is working with London developer London & Oriental as the asset manager for the project and expects construction to last for four years.
DealMakerz thinks the deal is a clear sign that overseas investors are still loving London despite the political upheaval following the EU Referendum.
In the first half of last year, investors from China and Hong Kong accounted for half of the capital’s 64 office real estate transactions. Fees are significantly cheaper for investors in Hong Kong and China than they previously would have been because of the struggling Pound.