Joseph Lau’s Chinese Estates is in advanced talks to buy a prime St James’s asset in an off-market transaction.
The investor is understood to be negotiating with Standard Life to purchase 23 King Street, SW1, for around £140m – a yield of just below 3.5%.
Standard Life Investments Pooled Pension Property Fund acquired the seven-storey, 45,000 sq ft office in 2010 from Deka for £44.5m.
Following a redevelopment, it has been fully let to tenants including Balyasny Asset Management, Temasek, Bordier & Cie and London Executive Offices. Quoting rents at the office are £115 per sq ft.
The deal would be the third West End trophy that Chinese Estates has bought this year.
In March it acquired the freehold of Zara’s new shop at 61 Oxford Street, W1, from BA Pension Fund for £183m – a 2.5% yield.
It also scooped up the Mayfair headquarters of private bank Kleinwort Benson, 14 St George Street, W1, from Aberdeen Asset Management for £121.7m – a 3.5% yield.
The 51,861 sq ft office is fully let to the bank until 2020 at an average passing rent of £86.88 per sq ft – below current rents.
The property was the first acquisition made by Chinese Estates since it bought Goldman Sachs’ London headquarters at River Court, 120 Fleet Street, EC4, for £300m in 2011.
Savills is advising Standard Life in the sale, and is also marketing the company’s neighbouring property, 20 King Street, SW1, for offers in excess of £47m – a 3.83% yield.
Chinese Estates was unrepresented.
Lau, the fifth-richest man in Hong Kong, was found guilty of money laundering and bribery by a Macau court in 2014 and sentenced to five years and three months in prison.
He has escaped extradition as Macau and Hong Kong have no extradition treaty.
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