A group of four Hong Kong property companies including C C Land Holdings Ltd. has agreed to buy a majority stake in a skyscraper planned for the City of London financial district, two people with knowledge of the plan said.
The investors will also fund the construction of the 40 Leadenhall office project, nicknamed Gotham City, the people said, asking not to be identified as the details are private. Vendor TH Real Estate, an affiliate of Nuveen, the asset-management unit of the Teachers Insurance & Annuity Association of America, retains a minority stake and will manage the development, they said.
Spokesmen for TH Real Estate and C C Land declined to comment. The other members of the consortium could not be identified at this stage.
Rendering of 40 Leadenhall/Gotham City. (Credit: TH Real Estate, Source: Bloomberg)
Hong Kong investors have been the biggest buyers of large London office buildings with long leases since the Brexit vote sent the value of the pound plunging. The deal would be the first sign of companies from the region seeking higher returns by taking on riskier office development projects that will need to find tenants after the U.K. negotiates its exit from the European Union.
The building will have about 905,000 square feet (84,000 square meters) of office space, about a third more than the tower known as the Walkie Talkie. It has yet to secure any tenants and a decision on whether to commence construction on a speculative basis has yet to be taken, the people said.
Construction Contract
The tower will take about four years to complete and construction firm Mace Group Ltd. is the preferred bidder to win a contract valued at about 450 million pounds ($603 million) to build the property, the people said. A spokesman for Mace declined to comment.
Work demolishing the existing buildings on the plot near Lloyd’s of London will start early next year, they said. TH Real Estate held initial discussions in 2014 with the insurance market about a move to the building, the Sunday Times reported at the time.
The design of the building, will have space for about 10,000 people, was inspired by the neo-gothic architecture of Chicago and New York, earning it the Gotham City nickname.
C C Land paid 1.15 billion pounds to purchase the London skyscraper known as the Cheesegrater earlier this year and is involved in a venture to build homes in the Nine Elms district on the south bank of the river Thames. The Hong Kong-listed company, which is majority owned by Cheung Chung Kiu, has been diversifying its portfolio internationally following the sale of a portfolio of property in Western China, according to its website.
This story, written by Jack Sidders for Bloomberg, first appeared on Dec 15.