PERE reported last week that CC Land, controlled by Cheung Chung-kiu, was not the only Asian bidder in the running for the Leadenhall Building. Singaporean firm Temasek and Seoul-based Korea Investment Authority also made bids for the property, albeit unsuccessfully.

Furthermore, the sale indicates rebounding property values in the UK, PERE reported. The Leadenhall Building was valued at £1 billion prior to the Brexit referendum last June, but its valuation had slipped to about £915 million following the surprise outcome of the vote.

Even so, London appears to represent an attractive option for investors in search of yield, the Wall Street Journal reported last week. Cap rates on London office properties averaged 4.6% at the end of 2016, compared to 2.6% in Hong Kong.

LONDON—Last week's headline-making office sale in London's City District serves as a case in point for a CBRE report also issued last week: that Chinese investors dominate outbound Asian investment in commercial properties. Chongqin-based CC Land Holdings' all-cash US$1.4-billion deal for the Leadenhall Building, owned by British Land and Oxford Properties Group in a 50/50 joint venture, represents the largest Chinese acquisition to date of UK real estate. It's also the highest price paid for a single London asset since the Qatar Investment Authority acquired the headquarters of HSBC for £1.1 billion three years ago.

“Chinese investors remain active in deploying capital offshore into global real estate assets,” says Yvonne Siew, executive director, CBRE Global Capital Markets. “Despite recent policies by the government restricting Chinese outbound investment, there continues to be a steady flow of Chinese capital overseas as investors seek to diversify their portfolios.”

At 736 feet, the Leadenhall Building—nicknamed the Cheesegrater for its distinctive appearance—is the tallest building in the City district. The British Land/Oxford JV developed it between 2010 and 2014. Its 610,000 square feet is 100% occupied, and has achieved record office rents for the submarket of more than £100 (approximately US$123) per square foot.

“British Land and Oxford Properties took a bold step at the early stages of the UK's economic recovery to develop the Leadenhall Building to generate a high quality, long term income stream,” says Tim Roberts, head of offices and residential, British Land. “It's a decision which has really paid off. Through a strong, collaborative partnership, we have delivered an iconic, award-winning building let to high calibre occupiers at record City rents. This sale shows continued investor appetite for best in class, well located property in London.”

PERE reported last week that CC Land, controlled by Cheung Chung-kiu, was not the only Asian bidder in the running for the Leadenhall Building. Singaporean firm Temasek and Seoul-based Korea Investment Authority also made bids for the property, albeit unsuccessfully.

Furthermore, the sale indicates rebounding property values in the UK, PERE reported. The Leadenhall Building was valued at £1 billion prior to the Brexit referendum last June, but its valuation had slipped to about £915 million following the surprise outcome of the vote.

Even so, London appears to represent an attractive option for investors in search of yield, the Wall Street Journal reported last week. Cap rates on London office properties averaged 4.6% at the end of 2016, compared to 2.6% in Hong Kong.