June 18, 2012 / 8:57 AM / 5 years ago

HK investor buys big chunk of London development

LONDON, June 18 (Reuters) - A Hong Kong investor will plough about 480 million pounds ($751 million) into a development in east London’s Greenwich peninsula to take a majority stake in the 150-acre scheme, the second deal this month in which an Asian company has bought a significant chunk of the UK capital.

In a joint venture alongside British developer Quintain Estates, Knight Dragon, a vehicle controlled by the chairman of Hong Kong company New World Development, will take a 60 percent stake in the scheme of homes, offices and shops, with Quintain holding the rest.

Quintain’s share price rose 25 percent in early London trading to 41.25 pence on the back of the announcement that analysts at Peel Hunt said would “accelerate development through the vastly increased firepower”.

Australian developer Lend Lease, which previously held a half stake alongside Quintain, will sell its interest for about 100 million pounds. As part of the deal Knight Dragon will provide up to 300 million pounds of debt funding.

The deal follows an agreement earlier this month to sell London’s landmark Battersea Power Station to Malaysian investors SP Setia and Sime Darby for 400 million pounds.

Central London has been the focus of a string of deals by Far Eastern investors in recent years looking to benefit from the city’s perceived safe haven appeal and the iconic nature of some of its real estate.

The Greenwich scheme, which is near the O2 concert venue, will include more than 10,000 new homes and space for 25,000 workers along a 1.4 mile stretch of the River Thames.

“Together we are well placed to turn our vision for this landmark project for London into reality, creating thousands of homes and jobs in the process,” Quintain chief executive Maxwell James said.

James was appointed last month amid suggestions by some analysts that investors were running out of patience with previous boss and founder Adrian Wyatt over the company’s performance during the financial crisis, with its shares trading at a 70 percent discount to net asset value at the time.

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