HK’s Liu Chong Hing Buys London Commercial Property
UNITED KINGDOM – Hong Kong-based Liu Chong Hing Investment has purchased Barratt House, a 7-storey wedge-shaped commercial building in London’s West End from British insurer Aviva Life & Pensions UK for £44 million, which translates to £2,716 psf based on the property’s net leasable area (NLA) of 16,200 sq ft, reported Mingtiandi on Tuesday evening (11 April, SGT).
Located at 341-349 Oxford Street, the commercial property consists of 1,904 sq ft of public residential units, 6,052 sq ft of retail premises, and 8,244 sq ft of refurbished office space.
The last two asset classes are fully let by 7 occupants, and Barratt House generated a total rental income of £2.455 million in 2022, indicating a gross income yield of around 5.6 percent. The building stands on 4 separate land plots with a leasehold tenure of 1,872 years.
Sited in a corner near the intersection with New Bond Street at Mayfair’s northern edge, the commercial property is strategically located within the city’s Oxford Street shopping haven. It also stands amidst several large-scale redevelopments in the vicinity.
“With the prime location of the property coupled with the implementation of the New West End Company initiatives for transformation of Oxford Street, the board considers that the long-term appeal of Oxford Street will benefit investment return of the property,” commented Liu Chong Hing Investment’s Chairman Liu Lit Chi.
It appears the Hong Kong-based company took advantage of a slowdown in the city’s commercial real estate market to clinch its first property in the United Kingdom, as it expands into new real estate markets after focusing on mainland China and Hong Kong.
Despite the slowdown, Colliers said West End has performed especially well thanks to the continued lack of Grade A office stock and vacancy levels at less than 2 percent as compared to the London core office market.
“The recognised legal system, relatively depressed sterling and stability returning to the debt markets continue to drive demand for West End assets,” noted Colliers’ Managing Director for the Asia Pacific capital markets, Chris Pilgrim.
While Liu Chong Hing has chosen this moment to enter London’s property market, other Greater China investors have been looking to exit the market. In March, it was reported that Cheung Kei Group has been facing difficulties attempting to sell 2 office properties in Canary Wharf after defaulting on a loan secured by one of the two commercial buildings.
The mainland Chinese company has appointed Jones Lang LaSalle (JLL) to market both 5 Churchill Place and 20 Canada Square. Notably, Cheung Kei Group has already defaulted on a £265.5 million loan backed by 20 Canada Square when it came due in October 2022, while the loan collateralised by 5 Churchill Place will come due later this month.