China's Greenland buys Europe's tallest residential tower site

LONDON, March 12 Wed Mar 12, 2014 7:46am EDT

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LONDON, March 12 (Reuters) - Chinese state-backed developer Greenland Group has snapped up the stalled site of Europe's tallest residential tower, in London's Canary Wharf financial district, after an earlier deal with an Irish property investor fell through.

The site on Canary Wharf's northwest corner was sold by Commercial Estates Group (CEG), which had permission to build a 242-metre tall building containing 700 homes, offices and shops.

Greenland said on Wednesday it had exchanged contracts with CEG to buy the Hertsmere site, which it expects to be worth 600 million pounds ($1 billion) when complete. The deal marks its second London acquisition in 2014, after it bought the site of the capital's oldest brewery in January.

"As one of the few tall tower sites in London, Hertsmere represents an excellent opportunity for Greenland to add a significant landmark to the London skyline," the companies involved in the deal said in a statement.

Greenland's move reflects a growing trend among Chinese developers to seek deals abroad as the Chinese government steps up measures to cool the country's real estate sector, squeezing sale prices and profits.

Last November, Irish developer Ryan Corporation said it had bought the stalled site for 100 million pounds and would try to revise the scheme's current permission to allow the whole 75-storey tower to be made up of homes.

A spokeswoman for Jones Lang LaSalle, who acted on behalf of CEG, declined to comment on why the deal with Ryan Corporation fell through. (Reporting by Brenda Goh; editing by Stephen Addison)

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