British Land Co. Plc (LSE: BLND) and Oxford Properties, the global real estate arm of OMERS, the pension plan for Ontario’s municipal employees, have agreed to sell London’s iconic Leadenhall Building for £1.15 billion to Hong Kong-based C C Land Holdings Ltd (HGK: 1244), whose billionaire chairman Cheung Chung Kiu controls a 50.4% stake in the company.
The deal is said to be the second-biggest sale of a UK building ever, and the biggest sale of a single building in the UK since 2014, when the HSBC tower in Canary Wharf was sold to Qatar’s sovereign wealth fund for £1.18 billion. It is also one of the biggest Chinese purchases of UK property, according to the Guardian.
British Land and Oxford Properties developed and own the Leadenhall Building as an investment in a 50/50 joint venture formed in 2010.
At 736 feet, the Leadenhall Building, known as the Cheesegrater for its triangular shape, is the tallest building in the City of London. It provides 610,000 sq ft of world class office accommodation over 46 floors, in a prime location. Its distinctive sloping shape was designed to protect views of St Paul’s Cathedral and offers a range of floorplates with spectacular views over London. The building was voted City of London Building of the Year 2015 by the Worshipful Company of Chartered Architects.
Construction of the Leadenhall Building started in early 2011 and completed in summer 2014. The building is fully let with an average remaining lease term of over 10 years to break, and has achieved record rents for the City of more than £100 per sq ft. It is occupied by high caliber businesses including insurers Aon and MS Amlin, and the building’s architects Rogers Stirk Harbour + Partners.
Tim Roberts, Head of Offices and Residential, British Land, said: “British Land and Oxford Properties took a bold step at the early stages of the UK’s economic recovery to develop The Leadenhall Building to generate a high quality, long term income stream. It’s a decision which has really paid off. Through a strong, collaborative partnership, we have delivered an iconic, award-winning building let to high calibre occupiers at record City rents. This sale shows continued investor appetite for best in class, well located property in London.”
Paul Brundage, Executive Vice President and Senior Managing Director – Europe, Oxford Properties, said: “Oxford Properties has enjoyed a highly successful partnership with British Land through our joint investment in the development, delivery and management of this iconic building. We have delivered on our strategy of ensuring that The Leadenhall Building meets its potential to become one of the most commercially successful investments in London. The Leadenhall Building has been a cornerstone of our London business and has propelled Oxford Properties to a leading position in European real estate development and investment. We are fully committed to the UK and Europe for the long term and are looking forward to pursuing further investment opportunities going forward either on our own or with like-minded partners such as British Land.”
The deal is subject to approval by C C Land’s shareholders. British Land and Oxford Properties were advised by Cushman & Wakefield, Eastdil Secured, Mayer Brown and Herbert Smith Freehills.