First Pacific Davies in talks to buy $150m stake in Savills

Savills, the British commercial and residential property agent, yesterday said it was in discussions to sell 20 per cent of its capital to First Pacific Davies (FPD), the property group owned by First Pacific Co.

The deal, worth at least GBP12.3 million (about HK$150.97 million), aims to capitalise on the huge influx of property buying in London and other large cities from Hong Kong individuals.

Credited for helping to lift the London property market out of a recession in the early 1990s, overseas buyers now account for about 50 per cent of Savills' London business. A big proportion is from Hong Kong.

Managing director Aubrey Adams said China's resumption of sovereignty over Hong Kong meant a whole new potential market had come on stream.

He dismissed suggestions that much of the property buying from Hong Kong was transitory and due more to SAR residents buying potential boltholes ahead of the handover.

'A lot of it is long-term investment. People are seeing the opportunity to acquire an income-producing asset,' he said. 'London is an extremely attractive place to invest in.' Discussions with FPD were 'fairly well advanced' and would involve Savills' issue of about 10.6 million new shares to FPD, which would be priced at a premium to Wednesday's closing price of 116.5 pence, he said.