Chinese investor in talks to sell stake in London office tower to Brookfield

{"text":[[{"start":7.38,"text":"One of China’s largest insurers is in talks to offload its stake in a City office tower to Brookfield Corporation in the latest sign of the country’s property investors retreating from the London office market."}],[{"start":18.56,"text":"China Life Insurance is negotiating to hand its 40 per cent stake in 99 Bishopsgate to Brookfield, according to people familiar with the matter. The insurer, which invested in the office tower in 2015, plans to convert its holding into debt, they added."}],[{"start":34.4,"text":"Brookfield, which currently owns 20 per cent of the building, will become its majority owner, with Victor Dahdaleh, a Canadian businessman with metals and manufacturing interests, owning the rest. 99 Bishopsgate was valued at £280mn at the end of last year, according to financial statements."}],[{"start":52.32,"text":"Chinese investors piled into London’s office market in the latter part of the previous decade but have been unwinding purchases in recent years. Data from CoStar Group shows net buying by Chinese investors reached £10bn between 2017 and 2020, but they have since divested a net £3bn worth of assets since January 2021."}],[{"start":null,"text":"

"}],[{"start":73.76,"text":"Some are reluctant to sink more capital into buildings requiring upgrades and refurbishment ahead of new energy efficiency regulations coming into effect in England and Wales in 2031, according to agents and developers. Other Chinese investors are repatriating funds amid a property crisis at home."}],[{"start":91.52,"text":"CoStar senior director Mark Stansfield said: “After eight to 10 years of ownership, higher financing costs and more demanding refurbishment requirements have changed the economics of holding some assets.”"}],[{"start":102.04,"text":"99 Bishopsgate, which was built in 1976 and once occupied by HSBC, was renovated after being severely damaged by an IRA truck bomb in 1993. In recent years, the tower has leased office space to companies including law firm Latham & Watkins and Chinese tech giant Huawei."}],[{"start":122.24,"text":"Brookfield last year secured planning permission to demolish and redevelop the building into a 54-storey skyscraper. Demolition is scheduled to begin next year."}],[{"start":131.96,"text":"Some prospective US tenants were nervous about taking pre-lets at the building because they were not certain it was going to be finished under Chinese ownership, said people familiar with their concerns. Another person close to the plans said those worries were premature because marketing had not started for the tower."}],[{"start":147.24,"text":"Despite rising rents for premium office space, development in London has become more challenging because of regulations governing fire safety, rising building costs and higher interest rates."}],[{"start":159,"text":"China Life will not put in any follow-on capital for the building’s development if the deal with Brookfield is agreed, said a person familiar with the matter."}],[{"start":168.04,"text":"Brookfield declined to comment. China Life and Dahdaleh did not respond to requests for comment."}],[{"start":174.28,"text":"This story has been amended to clarify that Brookfield Corporation is in talks to take over China Life’s stake"}],[{"start":185.79,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794302741_9220.mp3"}