Cheung Kong 10.5 billion purchase of Grade A commercial buildings in London The rental income is nearly half of that in Central and the price is only one third.
After the new chairman of the Department’s Li Zeju took over, he continued to grow his career. Li Ka-shing, senior consultant of Changhe Department, has repeatedly stressed that after the sale of the Central Center, it can find projects to provide higher fixed income overseas. Yesterday, Cheung (01113) confirmed the acquisition of 5 Broadgate properties in Grade A office buildings in London, UK, with a purchase price of 1 billion pounds ( Approximately HK$10.5 billion), equivalent to selling 26% of the 40 billion yuan in the Central Centre, and the annual rental income is close to half of the centre. The industry means that the project’s rental return rate is close to 5%, which is a rare and excellent investment.
UBS leased until 2035
Changshi sold 75% of the Queen’s Center in Queen’s Road Central in November last year. In March of this year, Li Ka-shing pointed out that the sale of the Central Center reduced the annual fixed income by about RMB 800 million. However, it is certain that new investments will be made with the funds available. Find a fixed income project of 1.6 billion yuan. In May of this year, Li Ka-shing disclosed that the proceeds from the acquisition of state-of-the-art buildings in other countries can be doubled, and are being approached by the seller. Changshi expects fixed profit for this year will rise by more than 50% from 2016, creating a record high for the group.
Mr. Ma In-chi, a member of the executive branch of the company responsible for the acquisition, said that the property can generate a fixed income and a good return. The price of the building is only one-third that of the Central. Using a quarter of the proceeds from the sale of the Central Centre, Cheung Kong purchased the property and the annual rental income was close to half that of the Central, and the rental return was nearly double that of the Central.
5 Broadgate is a Grade A office building in the Central Business District of London. It is adjacent to the Liverpool Street train station and subway station. It has a floor area of approximately 1.2 million square feet. The property has been leased by the UBS Group as the UK headquarters since its completion in 2015. The lease period is until 2035. .
Zeng Huanping, managing director of Jones Lang LaSalle, pointed out that the rental return rate of the Central Centre is less than 3%, while that of the 5 Broadgate is close to 5%, which is an excellent replacement operation in terms of investment. At present, the return rate of Grade A office buildings in Hong Kong is only about 2%. Investment with a return rate of nearly 5% is substantial, and it is difficult to find property owners to sell. Any transaction is astronomical. Currently, there are not many investment properties with a return of 5% in London, and the return on investment in the general commercial center area is about 3%.
Zeng Huanping believes that although the market had worried that the Brexit would cause financial institutions to withdraw their headquarters, the actual situation was not as bad as imagined. The local economy has stabilized and has not been hit hard, and the exchange rate of the pound is still low. In recent years, many London-based commercial building owners have sought out Hong Kong buyers. In the past few years, large-scale transactions have been funded by Hong Kong enterprises. It is believed that the trend will continue.
Identify China-Hong Kong-British property investment
Ma In-chi added that if there are appropriate opportunities, it will continue to sell low-return projects while buying long-term fixed income with higher returns for investment. The Group has ample cash on hand and continues to identify projects such as real estate and infrastructure that meet stringent investment criteria in Hong Kong, China, Singapore and the United Kingdom. Chang Shen Executive Director Zhong Shen Qiang said that the group is deeply interested in the mode of development of rental housing advocated by the Central Government and is looking for real estate projects in the Mainland, hoping to participate in the development of long-term rental housing market.
As of the beginning of May, Changshi, together with its equity holdings, had a total of approximately RMB 143.3 million in land development and investment and hotel properties globally, of which Hong Kong and the Mainland accounted for 136.6 million square miles, and the United Kingdom accounted for 5.2 million. Fang Hao.