With US turmoil grabbing centre-stage, worries over Brexit seem to already be old news for Hong Kong real estate investors, after two locally listed property groups snapped up £234 million ($290 million) worth of London office buildings during the same week as the American election.
While Brexit hasn’t put the Bank of England up for sale, Asian Growth Properties was able to buy the building at 20 Moorgate in the City of London that houses much of the central bank’s operations. The Hong Kong-listed company paid around £154 million ($191 million) to Deutsche Fonds Holdings AG to acquire the building which is currently let to the Bank of England until 2027, the Estates Gazette reported.
The move is a step in a new direction for AGP. The firm had mostly focused on developing its property portfolio in Hong Kong and mainland China before the London acquisition. The 154,854 square foot (14,386 square metre) office building was put up for sale in March for a price of £160 million ($198 million). AGP is banking on the property to generate an annual rental income of £7.5 million ($9.3 million).
Chuang’s China Group Hears London Calling
While AGP was buying 20 Moorgate, just ten minutes walk across London’s financial district, a rival from its home city was buying its own 73,500 square foot (6,828 square metre) London office block. Chuang’s China Group bought 10 Fenchurch Street near the Tower Bridge this week from Standard Life for £80 million ($99 million).
Knight Frank began marketing the building in September at a price of £75 million ($93.1 million), but competitive bidding brought the price up from that starting point.
Standard Life owned the building for ten years, after purchasing it for £38.8 million ($48.1 million) in 2006. At the moment, a number of tenants including software consultancy Apptio, insurance company Atradius Credit Insurance and Hanover Real Estate lease space in the complex.
Asian Buyers Blow Off Brexit
While some speculated that Brexit would see buyers from Hong Kong and mainland China shy away from the UK, there have been a few office acquisitions that suggest the market isn’t as bleak as advertised.
Hong Kong-based Kingboard Chemical Holdings acquired a building that is home to co-working startup WeWork’s European HQ from Brookfield Property Partners for £271 million ($331 million) in late October. The Moor Place office complex is a five-minute stroll from AGP’s 20 Moorgate.
Another Hong Kong-listed outfit also bought into the neighborhood recently. China Minsheng Investment purchased Société Générale’s central London headquarters from the French bank for £84.5 million ($112.8 million) in September.
China Vanke got into the act during September as well, buying its first office building in the UK. The mainland developer reportedly agreed to buy Ryder Court in London’s West End from Henderson Global Investors for £115 million ($154 million).