July 27, 2017 / 6:47 AM / 2 years ago

Hong Kong's LKK to buy London's "Walkie Talkie" skyscraper

(Reuters) - Herbal health products maker LKK Health Products Group Ltd, based in Hong Kong, said on Thursday it would buy the “Walkie Talkie” skyscraper in London from Land Securities Group plc and Canary Wharf Group plc for 1.28 billion pounds ($1.68 billion), the highest price for an office building so far in the UK.

London has emerged as a hot property market for foreign investors, including those from Hong Kong and China, who have piled in after Britain’s vote to leave the European Union weakened sterling.

Chinese property magnate Cheung Chung-kiu’s CC Land Holdings Ltd agreed in March to buy a London skyscraper, that has been given the nickname “Cheesegrater” and owned by British Land and Oxford Properties, for 1.15 billion pounds.

For LKK Health Products Group, owned by Lee Kum Kee group, the deal to buy the “Walkie Talkie” building, through its unit Infinitus Property Investment (Hong Kong) Ltd, is its first outside of Hong Kong and China.

The company, best known for its oyster sauce, said it will hold the property for long-term investment, which will provide it a reasonable return from rental income and a stable capital appreciation.

The skyscraper, developed as a joint venture between Land Securities and Canary Wharf Group in 2010, is located at 20 Fenchurch Street.

The property, designed by architect Rafael Viñoly, is known for its Sky Garden, which has become a tourist attraction.

Land Securities, Britain’s largest listed property developer, said it would receive 641 million pounds from the sale. It said it would return 475 million pounds to shareholders, with the rest used to repay debt.

Land Securities, whose shares were up 2.1 percent in early trading, said its half of the property share was last valued at 567.5 million pounds as of March 31.

Reporting by Parikshit Mishra and Arathy S Nair in Bengaluru; Additional reporting by Clare Jim in Hong Kong; Editing by Edmund Blair and Sunil Nair

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