Hong Kong’s Kwok family joins Ballymore in £500m London property project
The Kwok family, controlling shareholders in Sun Hung Kai Properties, will build a joint venture residential-commercial project on the banks of The River Thames in East London costing £500 million (US$647 million) – the largest development by the Hong Kong company in the UK since Brexit.
The investment comes as a rising number of Hong Kong-listed companies are snapping up properties in London amid investment yields that have been compressed by soaring asset prices in Hong Kong.
Kwok Family Interests and Ballymore, the 35-year old Irish developer, have formed a 50-50 partnership and plan to build an 804-unit residential project called Goodluck Hope on a 2.7 hectare site. Due for completion in 2020, it will also provide 21,528 square feet of commercial space.
The joint plan was first submitted in January 2015 and approved by the London Borough of Tower Hamlets in September 2016, according to a statement provided to the South China Morning Post.
Thomas Lam Ho-man, senior director at property consultancy Knight Frank, said investors are flocking to London because the entry level is now too high in Hong Kong.
“Prime properties in Hong Kong are much more costly than London where they achieve a better yield. More importantly, the British pound lost at least 20 per cent and will make property more affordable for Hong Kong investors,” he said.
Lam believes more investors from Hong Kong and the mainland will continue their buying spree once the country’s economic prospect become clearer after Brexit.
Last week, Chinese Estates Holdings announced it would purchase a mixed use building in London for HK$1.76 billion.
Located at 11 and 12 St James’s Square and 14 to 17 Ormond Yard, London, the building provides 80,000 sq ft of grade A office space and is fully let with a current rental income of HK$79.35 million per year.
In March, a privately company owned by Henry Cheng Kar-shun, chairman of Hong Kong’s New World Development, committed to invest £1 billion to develop a mixed property project in London.
The project will comprise 800 flats, office space and 500 hotel rooms totalling an area of 1.4 million sq ft, sitting atop a complex that would house a bus station, cinemas, bars and shops, according to information provided by Cheng’s company Knight Dragon.
In the same month, Hong Kong-listed CC Land, controlled by Chinese tycoon Cheung Chung-kiu- announced it had agreed to buy the Leadenhall Building in London, the financial district’s tallest tower known as the “Cheesegrater”, for £1.135 billion, marking the largest ever Chinese purchase of British real estate.
John Mulryan, Ballymore’s managing director, said: “This partnership with Kwok Family Interests is an important deal for Ballymore.
“Goodluck Hope will create a new part of London’s river side. It has been designed to embrace East London’s rejuvenated creative spirit while respecting the location’s maritime heritage,” he said.