LONDON—China Construction Bank Corp. has acquired an eight-story office property at 111 Old Broad St. in the City financial district here for £110M, or approximately US $187 million. The seller, Belgian bank KBC Groep NV, will remain at the property long term under a sale-leaseback arrangement, while Construction Bank will use the 122,880-square-foot 111 Old Broad as its European headquarters.
“This successful transaction will allow KBC to continue its role in the City’s financial community from its well-known and ideally located premises while at the same time providing long-term stability in further developing its business activities,” says KBC Bank London general branch manager Theo Speelmans. Reported on Thursday by Bloomberg and the Wall Street Journal, the deal was announced by law firm Reed Smith, which represented KBC, two weeks earlier.
The state-owned Construction Bank recently was selected to become the first yuan clearing service in London. It’s the second largest lender in China; Bloomberg reported Thuesday that Construction Bank has joined other Chinese financial firms in buying London commercial property.
Nick Baybrook, head of city investment at Knight Frank, represented KBC in the deal, while CBRE negotiated on behalf of Construction Bank. “KBC and Knight Frank invested a huge amount of time and effort in refurbishing the building to create an exceptional headquarters office building in the heart of the Square Mile,” Baybrook says. Clifford Chance provided legal counsel for Construction Bank in the deal.