The Kuok family behind Hong Kong developer Kerry Properties has purchased an office building in the swanky St James’s district of London’s West End for £145.5 million ($198.8 million), becoming the latest members of Asia’s elite to pick up property in the playground of England’s aristocrats.
The seller of the eight-storey property, called Cassini House, was London-listed BMO Commercial Property Trust, which announced the disposal in a press release earlier this month.
A source in the UK brokerage circle named the Kuok family as the buyer of the recently-refurbished property, while various published reports identified HKEX-listed Kerry Properties as the acquirer. A Kerry representative told Mingtiandi on Monday that the group did not invest in Cassini House and would not comment further.
The deal is said to be the second West End investment in less than a year for the Kuok family, which is led by 97-year-old Shangri-La Hotel and Kerry Group founder Robert Kuok. The Johor Bahru-born billionaire’s investment groups him with fellow Hong Kong-based tycoons such as CC Land’s Cheung Chung Kiu and Lifestyle International Holdings’ Thomas Lau as some of the biggest Asian buyers of trophy properties in London over the past two years.
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Just two minutes’ walk from The Ritz London hotel, Cassini House provides 51,348 square feet (4,770 square metres) of office space, meaning the Kuoks paid roughly £2,834 ($3,874) per square foot for their trophy.
Richard Kirby, lead manager of BMO Commercial Property Trust, said the sale of the fully-occupied freehold building achieved a net initial yield of 3.2 percent and followed a competitive bidding process in which the company received several high-quality proposals.
The £145.5 million price reflects an 11 percent increase on the last external valuation of 30 June 2021 and a 19 percent jump from the year-end valuation of 31 December 2020, BMO said.
The property was refurbished in 2018, and property consultancy Savills, which began marketing Cassini House earlier this year, said the weighted unexpired term for the fully-leased building is 8.25 years at an average rent of £101 per square foot.
Cassini House is anchored by Artemis Investment Management, which occupies the lower ground, ground and first through fourth floors under a lease expiring in 2033. The fourth and fifth floors, meanwhile, are tenanted by Shore Capital Stockbrokers, while Japanese developer Mitsui Fudosan has offices on the sixth floor after starting its lease last year.
The property was the second-largest asset in the BMO trust’s portfolio, after St Christopher’s Place Estate, a West End mixed-use property valued in excess of £200 million, the trust said in its interim report last year.
The UK brokerage source described Cassini House as a “long-term hold” for the Kuoks and said the family is actively seeking diversification and creating a London portfolio with a mix of core income and value-add opportunities.
The Kuok family did not have to go far to find their latest piece of the Big Smoke, after the clan had picked up Queen’s House, a 13,609 square foot office building at 64-65 St James Street late last year for £34.5 million, according to an account by James Buckley in React News. The family purchased that freehold property in October after it had gone on the market just one month earlier.
The deal for 57 St James’s Street came during the same month that CC Land’s Cheung sold 1 Chapel Place in the West End to Chinese-Australian tycoon Paul Suen Cho Hung for £63.7 million, according to Savills.
Strolling through the streets near Cavendish Square Gardens, these latest West End investors may spot a few friends they recognise from Shouson Hill or The Peak, after Hong Kong’s K&K Property, which is controlled by Bossini heir Raymond Law Ka-kui and his son Kino, purchased a pair of office buildings in the neighbourhood last December for £180 million.
Also in the area is Thomas Lau’s Lifestyle International Holdings, which last November agreed to pay £250 million for 1 St James’s Square in the West End. Cheung of CC Land made what may have been the highest-profile London acquisition by a Hong Kong buyer last year when he agreed in January 2020 to pay a reported £210 million to purchase a 45-room mansion in Knightsbridge for use as his personal residence.
Kerry Keeps Rolling
The Kuoks’ Kerry Properties posted strong first-half earnings results, with net profit shooting up 251 percent year-on-year to HK$3.737 billion ($480 million). Underlying profit, which ignores the fair-value change of investment properties, climbed 113 percent year-on-year to HK$2.36 billion.
The group remains active in Greater China, teaming up with Singapore sovereign wealth fund GIC to purchase a mixed-use development site in Shanghai for RMB 6 billion ($930 million) in early 2021. GIC will hold a 60 percent stake in the joint venture, with Kerry owning 40 percent.
In August, Kerry spent nearly HK$500 million ($64.2 million) for 17 agricultural sites in Kwu Tung, an area of Hong Kong’s northern New Territories, with part of the expanse to be converted for residential purposes.