Nov. 29 (Bloomberg) -- Canada’s government has agreed to sell its diplomatic property in London’s Mayfair district to closely held Indian real estate developer Lodha Group for C$530 million ($501 million).
Canada will sell 1 Grosvenor Square and consolidate its diplomatic offices into one central London location, Canada House in Trafalgar Square, to save on operating expenses, the Canadian High Commission said in an e-mailed statement. Canada was advised by broker Savills Plc, while Knight Frank LLP represented Lodha, it said.
The Canadians are taking advantage of climbing central London luxury-home values -- which rose 6.8 percent in October from a year earlier, according to Knight Frank -- fueled by demand from overseas buyers including Chinese investors. They’re following the Greek, Dutch and U.S. governments, which have all offered diplomatic sites in west London for sale, with the latter two relocating their embassies to south London.
“The acquisition of this marquee asset overlooking London’s most renowned garden square, in the heart of Mayfair and in close proximity to Bond Street and Mount Street, is a great opportunity for our company,” Abhishek Lodha, managing director of Lodha Group, said in the statement.
The property was valued at 250 million pounds ($409 million), a person with knowledge of the sale process said in September. The 1 Grosvenor Square site was the U.S. Embassy in London from 1938 to 1960.
Lodha’s investment follows planned projects by Chinese developers.
Chinese state-owned developer Greenland Holding Group Co. plans to invest in London’s property market and is looking at three developments in the city, Chairman Zhang Yuliang said in an interview on Oct. 29.
Dalian Wanda Group, the Chinese developer controlled by the country’s richest man Wang Jianlin, said in June it would spend 700 million pounds on a 62-story luxury hotel and apartment building on the South Bank of the Thames.
ABP (China) Holdings Group Ltd., a closely held Beijing-based Chinese developer, in May signed an agreement with London officials to transform a 35-acre (14-hectare) site at Royal Albert Dock into the capital’s third business district after the City of London and Canary Wharf.
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