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May 4, 2017

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HK firm pays US$1.5b for ‘Cheesegrater’

A Hong Kong property developer has confirmed the near completion of its almost US$1.5 billion purchase of London’s “Cheesegrater” tower, as it takes advantage of the pound’s slump to snap up addresses in the British capital.

CC Land’s acquisition of the 224-meter-high Leadenhall Building, which earned its nickname from its wedge shape, is the biggest single property purchase in the UK since 2014, when a Qatari wealth fund bought London’s HSBC Tower for 1.2 billion pounds, or US$1.5 billion at current exchange rates.

The deal takes advantage of the slump in the pound, which plunged after the country voted to leave the European Union in June 2016 and is currently trading roughly 12 percent lower against the US dollar.

“Devaluation of the pound sterling is one of the major factors to draw interests to this market,” CC Land said in a filing to the Hong Kong stock exchange, confirming the US$1.47 billion purchase from real estate giant British Land and Oxford Properties.

“Both leasing as well as investment demands in prime office buildings have remained strong,” the firm said.

Britain’s economic growth has slowed to its weakest pace in a year, as it prepares for a general election overshadowed by its planned exit from the EU.

But CC Land said London was still an attractive place for investors from around the world, particularly from the Asian region.

The Hong Kong-based firm said the purchase was part of their business strategy “in investing in quality property developments in mature cities globally” and it would generate “stable and strong recurrent income.”

Completion of the deal is subject to the passing of the resolution by CC Land shareholders at a special general meeting on May 18.


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