Cheesegrater purchase financed by trio of banks

Bank of China (Hong Kong), HSBC and ING Real Estate Finance have joined forces for a financing of Hong Kong investor CC Land Holdings’ £1.15 billion (€1.3 billion) purchase of the ‘Cheesegrater’ building in the City of London.

The financing deal, thought to be the largest in the London market so far this year, finances CC Land’s purchase in March of the Leadenhall Building, a 46-storey prime office tower.

In a joint statement, the three banks said that they acted as joint mandated lead arrangers, joint book-runners and joint hedge coordinators in the deal. The lenders declined to provide additional loan details, although CoStar News reported that the loan is in the order of £644 million, which would reflect a 56 percent loan-to-value ratio.

The purchase of the Cheesegrater was the largest acquisition of a single building in the UK since December 2014, when Qatar Investment Authority bought the HSBC Tower in Canary Wharf for £1.174 billion.

British Land, the London-based property company, and Oxford Properties, the Toronto-based real estate business of Canadian pension Ontario Municipal Employees Retirement System, exchanged contracts for the sale in March.

The buyer, CC Land Holdings, is run by billionaire Cheung Chung Kiu. The Leadenhall Building was the firm’s second acquisition in the UK capital in three months, following its December 2016 purchase of One Kingdom Place, a 264,000 square foot office building in West London, from TH Real Estate for £292 million.

British Land and Oxford Properties bought the Leadenhall Building, which at 736 feet is the tallest property in the City of London, in 2010 in a 50/50 joint venture. Construction of the asset started in early 2011 and was completed in just over three years.

“We are very pleased in working with ING, HSBC and Bank of China (Hong Kong), amongst many willing banks and financial institutions, for the transaction of the Leadenhall Building,” said Dickie Wong, deputy chairman and executive director at CC Land. “This strengthens our confidence in the long-term London property market and we will continue to look for potential investment opportunities in this city, especially on those trophy and iconic buildings similar to the Leadenhall Building.”