C C Land has entered a JV to redevelop Whiteleys in London
Mainland China developer CC Land has committed £182 million ($236 million) to a London regeneration scheme worth £1.2 billion, pumping money into a city that analysts expect to offer more opportunities following the landslide election victory by Boris Johnson’s Conservative party.
Already the owner of London’s Cheesegrater skyscraper, the Chongqing-based company is joining forces with London-based property investment firm Meyer Bergman to transform the Whiteleys department store in Queensway into a 1.1 million square foot (102,193 square metre) mixed-use development.
The 50:50 JV expects to invest a combined £400 million in equity into the redevelopment, while funds managed by US private equity firm Apollo Global Management will provide a construction facility of £850 million to make sure the new structure comes together, according to the a joint announcement by CC Land and Meyer Bergman on 22 December.
The commitment by CC Land comes six years after Meyer Bergman acquired the retail centre just north of London’s Kensington Gardens for £115 million.
“Whiteleys represents an incredibly compelling proposition with the restoration of an iconic heritage asset,” said Dr Dickie Wong, CC Land’s deputy chairman and executive director.
Bagging an Iconic Redevelopment
Located on the fringes of London’s West End, the development near the west end of Oxford Street will comprise 153 apartments, an upscale hotel, and a shopping centre with a cinema, restaurants and a gym built behind the original 108-year-old facade.
C C Land’s Dickie Wong says the company has targeted an undervalued location
The development will deliver a “unique blend of residential, retail and hotel uses in an undervalued, yet prime central location that provides the opportunity for a material shift in both capital and rental value,” Wong noted.
Designed by Foster & Partners, the mixed-use development, which is due to reach completion in 2023, is a five-minute walk from Hyde Park Corner and is one of the few remaining undeveloped areas near the park, according to the announcement.
Returning to the London Market
The West End redevelopment marks the first publicly announced investment in London by CC Land since the Hong Kong-listed developer acquired the 225-metre Cheesegrater at 122 Leadenhall Street in 2017.
The Hong Kong-listed developer paid £1.15 billion for what was then the city’s tallest skyscraper, acquiring the 610,000 square foot Leadenhall Building – as the property was formally called – from British Land and Oxford Properties.
In the same year, the developer, together with a consortium of Hong Kong investors had been in talks to buy an office project at 40 Leadenhall nicknamed Gotham City. That deal eventually fell through, with M&G Prudential eventually acquiring the project this year for £875 million.
Investing in Boris-led Britain
CC Land is re-engaging with the London property market less than two weeks after Boris Johnson’s Tories took the latest UK parliamentary elections, as some analysts expect the Conservatives’ landslide victory to reanimate the city’s commercial property market.
“Now with the lifting of the political fog, London looks like an exceptional buy, particularly when compared with the likes of Paris, Milan and Berlin,” said Knight Frank’s Paul Hart, Executive Director, Greater China, Head of Commercial. “London’s appeal, in terms of investment return, will definitely draw out Hong Kong investors in 2020.”
The property services firm noted in a report issued two weeks ago that London’s commercial real estate consistently ranked as the top outbound capital destination for Hong Kong-based commercial investors from 2015 to 2018.
This year, however, investments by Hong Kong-based investors in commercial property in London dropped to $1.5 billion, less than half of the $3.1 billion spent during 2018.
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