Transactions - MAY 23, 2017

Asian investors continue to target London properties

by Andrea Waitrovich

Capital from Asia is continuing to flow into the London property market.

Recently, NorthStar Realty Europe Corp. has partnered with China Resources Land to acquire 20 Gresham St., a trophy office building located in the City of London, for approximately £300 million ($389 million) from AXA Investment Managers.

The acquisition represents CRL’s first real estate investment in Europe.

The seven-story office was constructed in 2008 and totals 242,807 square feet. It is currently fully leased to blue-chip financial services firms including ICBC Standard Bank Plc., TSB Bank Plc., Sacker & Partners LLP, and TLT.

Another Chinese developer, Beijing Capital Development Holdings, also recently purchased an asset in London, 2 Fleet Place House for £96.5 million ($120 million). And Hong Kong–based Sun Hung Kai Properties announced it has partnered with Ireland-based Ballymore to develop a residential-commercial project on the banks of The River Thames in East London costing £500 million ($647 million).

During the first quarter 2017, City of London investment volumes surpassed £2 billion ($2.6billion) for the second successive quarter, according to Colliers International. Purchases were even more weighted toward overseas money with 90 percent of activity deriving from non-U.K. investors. Figures were dominated by CC Land’s purchase of 122 Leadenhall St., EC3, which was sold for £1.1 billion ($1.4 billion).

Savills reports the April turnover was £694 million ($890 million) across nine deals, equating to an average lot size of £77.1 million ($100 million). This brings total turnover for the year so far to £3.4 billion ($4.4 billion) across 43 deals, which is up 13 percent compared with this point last year.

The rolling 12-month total turnover is currently £8.5 billion ($11 billion), 13 percent up on the long-term average.

In the City market, Savills is currently monitoring 61 investment opportunities totaling circa £3.8 billion ($4.9 billion). Of which, 25 are currently under-offer totaling circa £1.7 billion ($2.2 billion), leaving an estimated £2.1 billion ($2.8 billion) worth of available opportunities.

As of the end of April, Asian purchasers have accounted for the majority of turnover at 50 percent, followed by European purchasers at 26 percent, all of which were German investors.


Following are IREN stories covering recent transactions by Asian investors in the U.K. market:

Hong Kong developer unveils £1b London development

Malaysia fund sells London office property

Chinese developer acquires London office for £97m

Hong Kong investor purchases London’s Cheesegrater for £1.2b

Hong Kong investor buys London office for £292m

Hong Kong investor buys London building for £260m

Asian investor buys London buildings for £245m

Chinese developer buys another U.K. development


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