Canary Wharf bought by a Hong Kong family
The recent trend in the real estate market shows that there have been many Asians investing in properties in the West recently and in the latest deal of Songbird Estates which owns Canary Wharf, it has agreed to sell the building for a price of £153.5m.
Crosby Investment Holdings Inc of Hong Kong, owned by Vivien Chen has agreed to the deal. Vivien Chen also runs the Nan Fung group in Hong Kong which is a diversified conglomerate since 2009. Both companies have investments in London real estate and analysts say that both corporate and private investments were spotted frequently in London as it gets higher returns than the prime markets of Singapore and Hong Kong.
JLL’s head of property consultant Alistair Meadowns said that the property sold in the deal was a “part of the continued wave of Asian capital seeking to invest in London”.
“The view from Asia is that the fundamentals of the London office market are sound. Yields are compressed but compared to prime yields in Asian markets like Hong Kong and Singapore they’re still higher.” In 2010, 8 percent of buyers in Central London office market were Asian and the percent of investment by Asian buyers have grown to 30 percent by the end of 2013.
Canary Wharf Group is Songbird’s main subsidiary and it generates an annual rent of £8.58m which is 5.2 percent of the yearly yield of the rest of the portfolio the company operates. Following the announcement of the deal, Songbird’s share price has fallen by 1.4 percent in London.
Songbird also said that it will use the sale proceeds to build Newfoundland, a 58 – storey residential tower east of Canary Wharf for which the company has already secured approval and it will also use some of the proceeds on the redevelopment of Shell Center on the south bank.