Grosvenor Sells West End Trophy to Hong Kong Scion for $202M

Brexit may yet prove to have dire consequences for the UK, but it hasn’t stopped the kingdom’s royals from making a profitable property play this month, as the Duke of Westminster’s real estate firm sells off a West End commercial property to a buyer from a former colony.

Grosvenor Estate, which has managed the Duke of Westminster’s property holdings since 1677, announced last week that it had sold 10 Grosvenor Street, W1, a 65,000 square foot office block in the heart of London’s West End for £152 million ($202 million).

Royal Family Sells to Hong Kong Blue Blood

Grosvenor identified the new owner only as “a buyer based in Hong Kong,” however, the Estates Gazette account tagged the purchaser as Norman Ho, a Hong Kong resident with a background in banking, while clarifying that there was no relation to the family of Macau gaming magnate Stanley Ho.

According to market sources who spoke with Mingtiandi, the Norman Ho who purchased Grosvenor’s building on Grosvenor Street is Norman Ho Hau Chong, a son of Hang Seng Bank founder Ho Tim. Ho, who serves as an executive director of Hong Kong’s Miramar Hotel and Investment, is a director of several publicly-listed companies in the city.

Ho’s father was one of the founders of Hong Kong’s New World Development, whose current chairman, Henry Cheng, announced his own $1 billion investment in London real estate in February of this year.

Grosvenor Sees Strategy Paying Off

“This sale underpins the manager’s value add strategy of recent years, namely buying fundamental good buildings, undertaking refurbishments and re-letting and then selling,” commented Scott Rowland, the fund manager who led Grosvenor’s sales negotiations in the statement.

The sale comes around four months after a fund managed by Grosvenor had reportedly engaged property consultancy Knight Frank to sell the 133-year leasehold property, with a goal of achieving a four percent initial yield, according to an account in the Estates Gazette.

The five-storey structure, which is leased for an average rent of £100 per square foot has now sold for an initial yield of 3.7 percent.

Grosvenor Europe completed the transaction on behalf of the seller, Grosvenor London Office Fund (GLOF), after the fund had purchased a 50 percent stake in the property in 2007. The fund gained full ownership by acquiring the remaining stake from London-listed REIT Hammerson in 2014.

Hong Kong Buyers on a London Shopping Spree

The deal is just the latest inroad by Hong Kong investors into the British capital’s commercial property scene.

The real estate arm of Hong Kong’s oyster sauce titan Lee Kum Kee Group purchased 20 Fenchurch Street, known as the Walkie Talkie building, from a pair of British property firms for £1.3 billion ($1.7 billion) in August, marking the biggest-ever deal for a single commercial building in London.

And in May, tycoon Joseph Lau’s Hong Kong-listed developer Chinese Estates acquired 11-12 St James’s Square, a listed commercial building in the West End, from the Employees’ Provident Wealth Fund of Malaysia for £174.9 million ($227 million).