London: A Hong Kong firm struck a record deal for a London skyscraper yesterday amid a rise in foreign investment in property since the Brexit vote, but a slump in domestic demand hit the profits of real estate agent Foxtons.
Condiment-maker Lee Kum Kee, a family business that is best known for its oyster sauce, is buying up the building nicknamed the “Walkie Talkie” (pictured) for £1.3bn ($1.7bn), the highest price ever for an office building in Britain. The iconic 34-storey skyscraper in London’s insurance district, with three-tiered sky garden and restaurant on top, hit the headlines just after being built when it was blamed for damaging a car by reflecting the sun’s rays.
“This is the UK’s largest ever office deal,” Cushman & Wakefield, a commercial property giant which advised on the deal, said in a statement.
“Since the vote to leave the EU, capital targeting London from the Asia-Pacific region has increased to record levels,” said James Beckham, head of London capital markets at the property company.
The deal comes months after Chinese property magnate Cheung Chung Kiu bought another London landmark, the “Cheesegrater” building, for £1.15bn.
The previous highest price for a single piece of British commercial property was the HSBC tower in Canary Wharf which was bought by the Qatar Investment Authority in December 2014 for £1.175bn.
The value of the pound dropped sharply against the euro and the dollar making foreign investment into Britain more attractive. While that has boosted some parts of the property market, sales have slowed down overall because many Britons have been hit by the inflationary pressures caused by the increase in the price of imports.
London estate agent Foxtons said it had fallen victim to the lower demand yesterday as it reported a 64 percent drop in pre-tax profits for the first six months of the year from the same period last year.Profits fell to £3.8m from £10.5m.
The Foxtons announcement was the latest sign of a cooling in Britain’s property market as what happens in London tends to have a knock-on effect around the country.
