Owner of Hong Kong’s priciest mansion completes US$530m purchase of Canary Wharf office
Cheung Kei Group, the property developer owned by the owner of Hong Kong’s most expensive mansion, has completed its £410 million (US$530 million) purchase of a landmark 12-story office building in London’s Canary Wharf, in the biggest real estate sale in the city’s key financial district since 2014.
After its acquisition, the tycoon Chen Hongtian will rename the 20 Canada Square building as Cheung Kei Centre, according to a statement.
The 556,000 square-foot (51,600 square meters) office building, mostly leased out to BP and Standard & Poor’s, was put up for sale through JLL in March, and was first reportedly to be sold to Chen at the end of June. Chen, who promised to pay up all the cash within a month of his purchase, bought the building from Canada’s Brookfield Property Partners, beating back rival bids by Sidra Capital of Saudi Arabia, and a venture between Hines and HSBC Alternative Investments.
Leases on the building could generate up to 5.35 per cent in rental yields for his Shenzhen-based company.
Chinese capital had been increasingly pouring offshore for assets and investments, in search of higher returns on concern the renminbi could lose its value at home.
“Most of these types of investment are funded offshore, so the purchase is not subject to China’s capital controls,” said Knight Frank’s head of China research David Ji.
As a global financial centre with market depth and liquidity, London’s property assets are still attractive for global investors for its stable return and potential for capital appreciation, Ji said.
In March, Chongqing property developer CC Land agreed to buy the Leadenhall Building in London, known affectionately as the “Cheesegrater,” for £1.135 billion, making it the largest ever Chinese purchase of British real estate.
In the same month, China Minsheng Investment Corp purchased Societe Generale’s London headquarters for £84.5 million.
Chinese capital including Hong Kong, accounted for 31.2 per cent of overseas investment in London’s central city office space last year, according to Knight Frank’s estimates.
Chen, 58, is a low-profile property tycoon, who’d amassed a fortune estimated at 18 billion yuan (US$2.7 billion) according to the 2016 Hurun Report and is a major stakeholder of Hong Kong-listed China South City Holdings.
Born in China’s Guangdong province, he moved to Hong Kong in the early 1990s. Along with his millions square metre property assets in China, he also owns a huge amount of global equities and bonds.
Last year, he made headlines after buying a 9,212 sq ft mansion at 15 Gough Hill Road at The Peak in Hong Kong for HK$2.1 billion, a record price in the world’s most expensive residential market, and counting it among one of the world’s most premium addresses. In July last year, he separately bought an office tower in Hung Hum for HK$4.5 billion.