Commercial Property

London’s ‘Cheesegrater’ on the market for €1.2bn

Chinese investment fund reported to be in talks with British Land and Oxford Properties

An investment company of Chinese property magnate Cheung Chung Kiu is interested in the Leadenhall building, also known as the “Cheesegrater” Photograph: Simon Dawson/Bloomberg

Tue Feb 28 2017 - 12:45

British Land and joint venture partner Oxford Properties are in advanced talks to sell the "Cheesegrater" skyscraper in London, the company said on Tuesday.

An investment company of Chinese property magnate Cheung Chung Kiu is reported to be offering about £1.02 billion(€1.2 billion) for the City building.

The deal would be the biggest single property purchase in the UK since 2014, CoStar News reported, without saying where it got the information. The Chinese company beat state-owned rival bidders Korea Investment and Temasek Holdings of Singapore to secure the deal, according to the report.

British Land and Toronto-based Oxford Properties are in advanced negotiations to sell the building which was fully let out in 2016, the UK real estate investment trust said in a statement Tuesday, without naming the buyer. It said a deal wasn’t certain.

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Bloomberg reported earlier this month that Mr Cheung's Hong Kong-based property vehicle, C C Land, was in talks to buy British Land's 50 per cent stake in the tower. Oxford Properties, which invests in real estate for OMERS, one of Canada's largest pension plans, holds the other 50 per cent stake. Formally known as the Leadenhall Building, the "Cheesegrater" nickname is derived from its wedge shape.

“It is not certain that these discussions will lead to a sale of the building,” British Land said in a statement.

British Land’s shares rose as much as 1.7 per cent to the highest in more than a month. The REIT wouldn’t comment beyond the statement, while Oxford Properties, CC Land and Temasek declined to comment.

The Cheesegrater has achieved record rents for the City of London financial district of more than £100 per square foot and is leased to tenants including Aon and Amlin.

British Land plans to use the money raised from the sale to finance the construction of an office building at the Broadgate complex, next to Liverpool Street railway station.

Chinese and Hong Kong investors spent £2.9 billion – more than buyers from any other region – on central London offices in 2016, broker Knight Frank said in a report earlier this month.

C C Land agreed last month to buy a separate office building in London for HK$2.9 billion.

– Reuters / Bloomberg

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