Chinese Estates Holdings, a property investment and development company controlled by Joseph Lau Luen-hung, has acquired a grade A office building in London for GBP280 million (HK$3.45 billion).
The deal follows the purchase by another local property investor, Lai Wing-to, of a six-storey retail and office building on Oxford Street in the British capital for GBP31.85 million in November.
In the latest signal of Hong Kong investor interest in London property, Lau bought the office building, River Court, at 120 Fleet Street. The building is occupied on a long lease by Goldman Sachs, which uses it as its headquarters in Britain. Property agents estimated Chinese Estates could enjoy a rental yield of 5.5 per cent on its investment.
The freehold office building occupies a 63,000 square foot site and provides a total gross floor area of about 430,000 sqft. The purchase translated into a price of GBP651 per square foot.
Henry Lam, executive director of investment services at property consultancy Knight Frank, who brokered the deal, said London properties priced below GBP30 million were the most welcome in the investment market, particularly properties that also offered retail outlets.
Despite the uncertain economic outlook in Europe and increased tax rates on the banking industry in Britain, London remained a major financial centre. 'It is not easy for financial institutions to find a replacement, and the tax rates are still attractive to the institutions and foreign investors,' he said.