Apr 23, 2024
Hong Kong Developer Weighs Stake Sale in London Office Skyscraper Project
, Bloomberg News
(Bloomberg) -- Hong Kong developer Lai Sun Development Co. is considering options for a planned office tower in the City of London, including a potential sale of a stake in the project.
The group has appointed Eastdil Secured and DBS Group Holdings Ltd. to advise on finding a partner for the 100 Leadenhall Street project, according to people with knowledge of the appointments. The financial advisers are currently undertaking due diligence on the project and could seek a funding partner later in the year or in early 2025, the people said, asking not to be identified as the process is private.
The process is at an early stage and there is no certainty that Lai Sun will ultimately pursue a sale of part or all of the project.
A representative for Lai Sun declined to comment. The company said in its interim report that it is “currently considering options and timing for the redevelopment.”
The City of London approved in 2018 the plan for the 56-story building that will be located next to the Gherkin skyscraper. The proposals include about 1.1 million square feet of office space that would be built on a site currently occupied by buildings at 100, 106 and 107 Leadenhall Street.
Soaring construction costs and falling valuations have upended developers’ appraisals of new projects, forcing some to reconsider. Still, the dearth of high quality office space being built is helping push rents for the best buildings higher as companies seek premises that will help attract and retain talent and meet environmental targets. That’s leading some to make contrary bets on a market that’s been plagued by fears over the long-term impact of more flexible working.
The 100 Leadenhall Street project is one of a series of planned new office skyscrapers in London’s main financial district that have been approved. But few projects are pushing ahead without first securing tenants. British Land and GIC this month leased a third of a new tower project at their Broadgate complex to Ken Griffin’s Citadel, paving the way for work to start.
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