Chinese Estates Sells London Office Block to Oracle’s Larry Ellison for 19% Below Asking Price

Chinese Estates Holdings has completed the sale of an office block in London’s West End for £162 million ($203.1 million), a sum representing a 19 percent discount to the Hong Kong-based company’s asking price for the property.

The firm formerly chaired by fugitive tycoon Joseph Lau sold 11-12 St James’s Square and 14-17 Ormond Yard to the Ellison Institute of Technology, Colliers confirmed Monday in a LinkedIn post. EIT is a research centre founded by billionaire Oracle chairman Larry Ellison and affiliated with the University of Oxford.

“This remarkable transaction highlights our team’s commitment to delivering outstanding results for our clients,” said Sean Tsoi, a London-based associate director for international capital markets at Colliers, which advised Chinese Estates on the sale.

The disposal results in a capital loss for the HKEX-listed company, which acquired the freehold property from Malaysia’s Employees’ Provident Wealth Fund in 2017 for £175 million (then $227 million), with the value of the asset having fallen to £163.9 million in September 2021. The property averaged 14.2 percent occupancy during the first half of 2024.

British Retreat

Situated a four-minute walk from Piccadilly Circus tube station near Duke of York Street, 11-12 St James’s Square and 14-17 Ormond Yard comprises two adjoining buildings with a total net lettable area of 82,374 square feet (7,653 square metres) across six upper levels, the ground floor (used by Chinese Estates as its UK office) and a basement level.

The sale price translates to £1,967 ($2,466) per square foot of net lettable area. Chinese Estates had reportedly sought £200 million for the Grade A asset, one of the group’s last remaining UK investment properties, with the developer last August having sold the 14 St George Street office block in the West End.

The company is also understood to be weighing an exit from its flagship office redevelopment at 120 Fleet Street in the City of London, while Lau has reportedly put his Belgravia mansion up for sale at an asking price of £90 million.

The latest divestment leaves a retail, office and residential asset at 61-67 Oxford Street and 11-14 Soho Street as Chinese Estates’ sole remaining investment property in London.

Ellison’s interest in buying 11-12 St James’s Square and 14-17 Ormond Yard was first reported last month by CoStar News, which said the property’s buyer was wholly owned by the Lawrence J Ellison Revocable Trust with the Oracle co-founder as sole beneficiary.

Slumps Drive Divestment

Chinese Estates is among a growing cohort of Hong Kong-based investors rushing to divest UK assets amid property slumps both in London and at home, marking a reversal from the influx of Asian investment into the British capital in the years leading up to the pandemic.

Joint Treasure International, a fund backed by investors including New World Development’s Cheng family, Wharf Real Estate’s Woo family and Far East Consortium International chairman David Chiu, in November sold the 3 St James’s Square office block, located just steps from 11-12 St James’s Square, to US commercial REIT Realty Income for a reported £125 million.

In September, HKEX-listed developer China Motor Bus Company agreed to sell the Albany House office block in London’s Westminster area to UK-based Integrity International Group for £47 million. That deal came a month after Hong Kong investor Lai Wing-to sold a commercial building at 147-155 Wardour Street to Singapore-based HECapital for around £35 million.

Also in August, veteran property player Lai offloaded an office and retail building at 291 Oxford Street & 2 Harewood Place to JP Morgan for £71.4 million after having been reported earlier this year to be seeking a buyer for Standbrook House at 2-5 Old Bond Street.