China Minsheng Acquires London Office Complex From Société Générale

China Minsheng Investment purchased Société Générale’s central London headquarters from the French bank for £84.5 million ($112.8 million) through its Hong Kong-based subsidiary SRE Group. According to a statement by SRE Group to the Hong Kong stock exchange, the deal includes the 41 Tower Hill building along with an adjacent car park.

Known as SG House, the French bank moved its operations to the building when it opened in the late 1980s. The 170,000 square foot (15,793 metre) office space is situated across the street from the Tower of London home of the famed Crown Jewels.

The acquisition by the mainland financial conglomerate comes almost two years after SG revealed it was moving its headquarters to a new office tower in Canary Wharf. The bank will occupy the ground and first to seventh floors in a new 26-storey office tower scheduled to open in 2020.

There has been some concern that the Brexit would cause office values in London to plummet, but it does not appear to have impacted this deal. SG secured close to its asking price for the building which was set in April prior to the EU referendum vote. The Telegraph reported the asking price to be £85 million ($113.4 million).

Plans Already in Place for SG House

As part of the sale, SG will lease the building from China Minsheng until March of 2020 for an annual rent of £5.9 million ($7.8 million) with an option for a two-year extension after that in place.

While China Minsheng collects the rental income between now and the end of the decade, it will also be looking at developing the office building and car park when the bank moves out.

SRE Grouped explained there is significant potential to enhance the property’s value through refurbishment and/or redevelopment in a notice to the Hong Kong Stock Exchange.

China Minsheng Finally Makes London Splash

The sovereign investment fund was finally able to secure a London office building after walking away from a deal to acquire the 55 Bishopsgate office complex from the Canada Pension Plan Investment Board for £180 million ($240 million) in June of last year.

Later in 2015, China Minsheng opted out of a deal with Beijing-based Advanced Business Park over the redevelopment of the Royal Albert Docks in London. The two sides failed to come to terms over ownership stakes after announcing a preliminary agreement earlier in the year.

Bloomberg reported President Xi Jinping eventually stepped in to revive the deal during a visit to London with ABP forming a joint venture with state-backed Citic Group.