CK Asset Sells UBS London Headquarters to Korea’s NPS for $1.6B

Li Ka-shing’s CK Asset has completed the sale of its 5 Broadgate building in London to South Korea’s National Pension Service (NPS) for £1.21 billion ($1.57 billion), marking the UK capital’s biggest property deal in almost five years.

The developer controlled by Hong Kong’s richest man had purchased the 13-storey office building, which serves as UBS’s London headquarters, from Singapore sovereign wealth fund GIC and local builder British Land for £1 billion in mid-2018, shortly after Victor Li took over the chairmanship of the company from his father.

Factoring in hedging profits, rental income throughout the holding period and the appreciation of the property value over the original cost, the return on investment for the disposal is HK$4.8 billion ($610 million) or 45 percent, CK Asset said late Friday in a filing with the Hong Kong stock exchange. Property services firm Colliers advised CK Asset on the sale.

“This significant transaction is an excellent opportunity for our client to realise their investment over a relatively short period,” Shaman Chellaram, Colliers’ senior director in Hong Kong, said Monday in a release.

Swiss Giant Firmly Rooted

5 Broadgate is fully leased to Swiss banking giant UBS through at least 2035 and forms part of the 4.7 million square foot (436,644 square metre) Broadgate commercial complex developed by LSE-listed British Land.

The NPS offer, which is understood to have been made in conjunction with Chicago-based LaSalle Investment Management, had trumped competing bids by Abu Dhabi sovereign fund Mubadala Investment Company and mainland billionaire Du Shuanghua’s Bright Ruby Resources to win the rights to the 732,876 square foot building in the Bishopsgate Without area of the City of London, according to a report in the UK’s Estates Gazette.

The property ultimately changed hands for about £1,651 ($2,150) per square foot of office space. CK Asset said it would use the net proceeds from the disposal for general working capital purposes.

The £1.21 billion transaction makes 5 Broadgate the biggest real estate deal in London since the £1.3 billion sale of the Walkie Talkie building to Hong Kong sauce maker Lee Kum Kee Group in 2017 and the largest non-tower deal to ever take place, Colliers said.

Capital Ideas

“We continue to see international capital invested into London’s quality assets, and we were delighted to help our client identify this significant opportunity and exit it effectively,” said Andrew Thomas, head of international capital markets for Colliers in the city.

CK Asset’s announcement comes after Singapore’s Ho Bee Land revealed in February that it had agreed to purchase the Scalpel office tower in the City of London from US-based insurer WR Berkley for £718 million ($972 million), extending a string of property acquisitions by Asian investors in the British capital.

Also in February, Hong Kong-listed Chevalier International Holdings disclosed that it had agreed to buy an office building at 30 King Street in the City from the BBC Pension Trust for £45.9 million. Earlier that same month, Singapore-based Sun Venture completed its purchase of 120 Moorgate, an office building in the City, from WeWork Capital Advisors for £148 million.

In January, Singapore’s Fragrance Group closed on its purchase of the Holiday Inn Kensington Forum to bring its portfolio of UK hospitality assets to five operational hotels and six development projects, according to the company’s website.