Case Study - One Financial Street
| Country: | China |
|---|---|
| Business area: | Asian Real Estate |
| Sector: | Office |
| Project value: | US$450m |
| Investment date: | 2007 |
| Completion date: | 2009 |
| Realisation date: | 2010 |
Development of prime office building in Beijing’s financial district.
One Financial Street is a prime, institutional-grade asset at the gateway to Financial Street, a well-developed business district in Beijing, benefitting from a scarcity of available land. It was acquired by a consortium of three investors, led by the InfraRed-Nan Fung Asian real estate team, in June 2007.
The development, comprising twin 20-storey office towers and a four-storey retail podium, was purchased from a semi-distressed seller at a price reflecting a significant discount to independently appraised market value.
The asset, with its strategic location and prestigious address, was well positioned to attract a high-profile anchor tenant and an exit via an en bloc sale to a growing number of domestic Chinese institutions seeking prime, income-producing properties.
The construction of the project was completed in early 2009 at the height of the global financial crisis. Through a difficult leasing market with high levels of vacancy in Beijing, the team strategically leased the less-prime office tower on a multi-tenanted basis while preserving the main front-facing office tower for a high-profile anchor tenant.
In September 2010, the team successfully secured the sale of the development to a major Chinese government entity that would take the main office tower for its own occupation. Offers were received from a number of onshore and offshore institutional buyers, creating price competition, which enabled the asset to be sold on attractive terms through an on-shore share sale.
