Chinese-led JV pays €1b for Clifford Chance's London HQ

A consortium led by China Life Insurance has snapped up Clifford Chance's headquarters in London's Canary Wharf for £795 mln (€1 bn).

China’s largest commercial insurance group is teaming up with Qatar's sovereign wealth fund to acquire 10 Upper Bank Street from Canary Wharf Group in a deal funded with both equity and bank debt provided by Barclays.

China Life Insurance is taking a 70% share in the asset, with Qatar Holding - part of the Qatar Investment Authority - buying 20%. Canary Wharf Group is retaining a 10% stake as well as the asset management of the asset.

Designed by Kohn Pedersen Fox, 10 Upper Bank Street provides over 1 million square feet (93,000 m2) of office space and is fully leased to law firm Clifford Chance till 2028, with the retail unit let to HCA International, the world’s largest private hospital group. The scheme is one of only five buildings of over a million square feet in London, all of which are situated on the Canary Wharf Estate.

The asset boasts a BREEAM Excellent rating and generates £44.35 mln of annual rents.

'The financing of this prestigious building required significant capital commitment and swift execution by the lender group,' said Brendan Jarvis, head of real estate EMEA at Barclays.

Qatar Holding is a significant shareholder in Songbird Estates, the parent company of the Canary Wharf Group.

A wave of Asian investment is aimed at the UK with a strong focus on trophy assets. Earlier this month, Malaysian pension fund KWAP acquired a majority interest in the Intu Uxbridge shopping centre in London for £175 mln (€216 mln), while in January China Investment Corporation, a sovereign wealth fund responsible for managing part of China’s foreign exchange reserves, signed a deal to acquire the Chiswick Park business park in west London from Blackstone for €917 mln.

Chinese state-owned developer Greenland Group has recently acquired the Ram Brewery site, to the West of London, for £600 mln in its first venture in the UK. It plans to develop a mixed-use tower on the site.

Asian investment in the UK rocketed by 112% last year to £10.3 bn, according to Kevin McCauley, senior director of research and consulting at CBRE in London. CBRE is forecasting that Asian investors will account for another £10 bn of deals this year.