Hong Kong investor swoops for Canary Wharf landmark with £380m deal
A HONG KONG investor has splashed out £380m to buy a landmark office in Canary Wharf, in a major vote of confidence for the ailing commercial property market.
Link Asset Management is snapping up The Cabot building in its first investment in the western hemisphere as it seeks to expand beyond China.
The deal was struck despite major uncertainty over the future of office working, with millions of staff still doing their jobs at home as the coronavirus pandemic rages on. The building in 25 Cabot Square has 481,605 sq ft of office space and is home to major tenants including Morgan Stanley and government departments. It brings in annual rent of £18.83m.
Many banks are choosing to keep their Canary Wharf staff at home until at least September, raising questions over the future of offices.
Insiders have said they are surprised at how successful remote working has been, and Barclays chief executive Jes Staley – whose headquarters are also in Canary Wharf – has said many firms are likely to look at whether they can permanently cut back on space.
Link is a real estate investment trust listed in Hong Kong, where there were similar forecasts of the death of the office during the 2003 Sars epidemic. These did not come to pass.
George Hongchoy, its chief executive, believes The Cabot has long-term growth potential.
He said: “It’s a prominent, Grade A building and one of the few freehold properties in Canary Wharf.” The £380m price tag was a 0.4pc discount on the July 17 valuation of the building by Colliers International. Data from the estate agent Savills suggests the commercial property market is coming back to life. Investors splashed out £1.3bn in the UK during June, a 42pc increase on the £755m spent in May.