Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

Chinese Estates Buys Listed London Building for ₤175M

2017/05/08 by Michael Cole Leave a Comment

11-12 St James Square

11-12 St James Square is in one of London’s priciest neighborhoods

Reports of Brexit doom and snap elections are attracting more Asian buyers to UK real estate, with Hong Kong billionaire Joseph Lau’s Chinese Estates becoming the latest to scoop up discounted assets in London.

Lau’s Hong Kong-listed development company has purchased 11-12 St James’s Square, a listed commercial building in London’s West End from the Employees’ Provident Wealth Fund of Malaysia for ₤174.9 million ($227 million) according to a recent announcement by Chinese Estates to the Hong Kong stock exchange.

And despite a recent rise in the British currency performance against the US dollar, the pound’s decline in the last year means that Chinese Estates is buying a property which once commanded the world’s highest office rent at a discount of more than five percent over what the Malaysian fund paid for the 81,500 square foot (7,572 square metre) building in 2011, in US dollar terms.

Malaysian Fund Sells into Brexit Headwinds

Malaysia’s EPF had put the elite office asset on sale earlier this year, along with another London property, with news reports indicating that the fund hoped to bring in as much as £205 million from the St James disposal.

Ultimately, while the sale price of ₤174.9 million was more in local currency terms than the fund’s reported August 2011 purchase price of ₤147.5 million, in US dollar terms, the price declined by more than $13 million.

Chinese Estates Expands London Portfolio

Joseph Lau

Chinese Estates boss Joseph Lau may be on his sickbed, but he’s still buying up London assets

The St James Place acquisition is the latest London deal for Chinese Estates, which bought up two other commercial buildings in the city during recent years.

Once serving as the head office of British property firm MEPC, the St James Square building once achieved the world’s highest office rental rates, when it leased two floors to a hedge fund for £140 per square foot in 2007.

In its announcement to the stock exchange, Chinese Estates said that this latest acquisition “is in line with the principal business of the Group in relation to property leasing,” and added that it intends to hold the asset as an investment property “for long term capital growth and rental purpose.”

The London acquisition comes 14 months after Chinese Estates agreed to buy 14 St George Street in London from Aberdeen Asset Management for £122 million. The Hong Kong firm also owns Goldman Sachs’ London offices at River Court, 120 Fleet Street, which they bought in 2011 for around £300 million.

Asian Investors See Opportunity Amid Brexit Worries

Chinese Estates is able to build up its London portfolio at a discount in part due to the impact that Brexit concerns are having on the city’s finance industry. Authorities in Frankfurt reported recently that some of the US’ biggest banks, including JP Morgan, Morgan Stanley, Goldman Sachs, Bank of America and Citigroup plan to move more than 1,000 job into the German city by the end of Brexit talks.

Despite the plans of these US banks, Asian investors remain confident in the UK, and have helped to drive real estate transaction volumes to their highest level since 2015, in local currency terms.

London became Europe’s most heavily traded real estate market in the first quarter this year, according to recent research by JLL. “With the sterling depreciation and slight drop in capital values, Asian investors – particularly private buyers from Hong Kong and China – have been the most active in London since last year’s Brexit vote,” says David Green-Morgan, Head of Research, Global Capital Markets at JLL. “The depreciation and capital values drop means that UK commercial real estate is now discounted by 16 per cent on average to overseas capital since the June 2016 referendum.

Chinese Estates and its Hong Kong cohort are among the most active of these Asian players, spending nearly $3 billion exclusively on UK properties during the first three months of this year, compared to only $842 million during the same period of 2016.

Related Stories

  • Singapore’s CDL Buys Former London Stock Exchange from Blackstone for £385MSingapore’s CDL Buys Former London Stock Exchange from Blackstone for £385M
  • Hong Kong Developer Chinese Estates Promotes Joseph Lau’s Wife, Chan Hoi-wan, to CEOHong Kong Developer Chinese Estates Promotes Joseph Lau’s Wife, Chan Hoi-wan, to CEO
  • Singapore’s Sun Venture Notches UK’s Biggest Deal of the Year with $742M London BuySingapore’s Sun Venture Notches UK’s Biggest Deal of the Year with $742M London Buy
  • Hong Kong Family Office Said to Buy London Commercial Building for £94MHong Kong Family Office Said to Buy London Commercial Building for £94M

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Outbound Investment Tagged With: acquisition, Chinese Estates, Featured, Joseph Lau, London, Outbound investment, weekly-sp

Value-Add Forum

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Knight Frank 390-396 Pitt St

Get Mingtiandi Delivered

Office Investment

MTD TV

MTD TV proptech show

COVID-19 Accelerates Proptech Adoption in Asia: Watch on MTD TV

Proptech Forum: Logistics Tech

Logistics Experts Reveal How Tech Is Reshaping Asia’s Distribution Centres

More MTD TV Videos

Latest Stories

george hongchoy tb

Link REIT Buying Half-Stake in Vanke Shanghai Mall for $429M

Hines's managing director, Drew Huffman

Hines Ramps Up APAC Presence With New Hires in Japan, South Korea

CapitaLand Sinks to S$1.67B Loss in 2020 H2 and More Asia Real Estate Headlines

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

BlackRock Selling Singapore Industrial Asset to AEW for $107MBlackRock Selling Singapore Industrial Asset to AEW for $107M

Asia Real Estate People in the News 2021-02-22Asia Real Estate People in the News 2021-02-22

CDL Acquires Majority Stake in Shenzhen Tech Park to Prop Up Sincere JVCDL Acquires Majority Stake in Shenzhen Tech Park to Prop Up Sincere JV


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team