Deal could become biggest in UK realty market since financial crisis

A section of Chiswick Park in London. China Investment Corp is reported to be among a trio of Asian investors vying to buy the 800 million pound ($1.3 billion) office complex. Getty Images

China Investment Corp, the country's sovereign wealth fund, is reported to be among a trio of Asian investors vying to buy an 800 million pound ($1.3 billion) London office complex, in what could become the latest in an increasing number of international property deals by Chinese buyers.

According to the Financial Times, citing unnamed resources, the deal would be the United Kingdom's highest value property deal since the start of the financial crisis.

Other bidders for the 1.1-million-square-foot (102,193 square meters) development, Chiswick Park, which is owned by the US private equity firm Blackstone, include government-backed funds from South Korea and Malaysia, according to the report.

The buyers are attracted by what are considered bargain prices in the UK capital.

The continued appreciation of the renminbi has also made international purchases more appealing to Chinese buyers.

Blackstone bought the property from a British-led consortium involving Aberdeen Asset Management Plc, Schroders Plc and Stanhope Plc at the start of 2011 for 480 million pounds, the FT said.

Grant Ji, a senior director in the investment department at the real estate service provider Savills Property Services (Beijing) Co Ltd, said: "London has seen a really brisk property market this year, as the financial crisis brought more buying opportunities.

"Moreover, the investment return in London's commercial property market is more steady than that at home, as the leasing terms there are much longer and the rent more steady."

CIC has been a regular bidder for British property.

The fund, which manages $410 billion, is reported to be in talks to buy Deutsche Bank's headquarters building in London for $403 million, according to a recent FT report.

CIC made its first investment in the UK property market in 2009, when it became a shareholder in Songbird Estates, which owns Canary Wharf — a district in the city employing 90,000 people, mainly financial services, and is home to the global headquarters of banks such as HSBC and Credit Suisse.

Zhang Ping, head of research at the international real estate service provider Cushman & Wakefield, added: "We have noticed a growing enthusiasm among Chinese investors for buying overseas real estate, and the UK and the United States are their favorite target markets."

Gingko Tree Investment Ltd, a London-registered Chinese State-owned fund controlled by the State Administration of Foreign Exchange, is also believed to be closing in on a 550 million pound deal to buy a stake in the University Partnerships Program currently owned by Barclays Plc, an industry insider told China Daily.

According to Cushman & Wakefield, Asian investors accounted for 45 percent of property transactions in the City of London this year.

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