Tuesday , January 23 2018

HNA weighs sale of two office buildings in London’s Canary Wharf

epa05675609 People walk in front of London's financial district Canary Wharf in London, Britain, 14 December 2016. Tens of thousands of banking jobs could be lost to continental Europe from next year if ministers do not agree a transitional deal on single market access with the EU, a Lords report on financial services after Brexit is expected to warn.  EPA/HANNAH MCKAY

Bloomberg

HNA Group Co. has approached brokers about the possible sale of two office buildings in London’s Canary Wharf financial district as it seeks to shed assets and cut its debt burden, two people with knowledge of the discussions said.
The Chinese conglomerate has sought advice from brokers on the value of 30 South Colonnade and
17 Columbus Courtyard with a view to selling them, two of the people said, asking not to be identified because the plan is private. It has also approached investors that may be interested in purchasing the properties, which cost HNA about 366 million pounds ($496 million) in total, a separate person said.
No final decision about a sale of the buildings has been made, the people said. A spokesman for HNA declined to comment.
The company, which started as a regional airline, is planning to sell about $5 billion of assets by April, Bloomberg News reported. Chief Executive Officer Adam Tan said in November 2017 that the group was looking to sell assets to conform with Chinese government policies. HNA plans to sell buildings in
New York and Sydney, while the company wants to cash out of properties in Hong Kong through real-estate investment trusts, he said, without elaborating.
HNA went on a debt-fueled buying spree in recent years, spending tens of billions of dollars on assets including trophy properties and stakes in Deutsche Bank AG and Hilton Worldwide Holdings Inc. The purchases strained its finances and drove up borrowing costs.
HNA purchased 30 South Colonnade in 2015 for about 235 million pounds, the people said. Thomson Reuters Corp., which leases the property, has since agreed a deal to move staff to another building in the district. The conglomerate paid 131 million pounds to acquire 17 Columbus Courtyard the following year, according to a statement released by the company at the time.
Credit Suisse Group AG rents the whole of the building, plans to vacate it in about two years and will not renew its lease when it expires in 2024, people with knowledge of the plan said. The need to find new tenants for both properties means the buildings would probably sell for lower prices than HNA paid for them, two of the people said. The Brexit vote has also made Canary Wharf less attractive to some investors due to the risk that bank jobs might leave the UK, they said.

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