- Group had planned to buy land in Shoreditch for Eaton Hotel
- Project was to include offices and apartments as well
Great Eagle Holdings Ltd. Chairman Lo Ka Shui said he has suspended plans for a 250 million pound ($330 million) real estate project in London because of the uncertainty following Britain’s decision to withdraw from the European Union.
In an interview in Hong Kong, Lo said that Brexit is likely to send property values lower, noting that seven listed property funds in the U.K. had halted client withdrawals.
“When you see seven property funds having stopped redemptions, that’s an extremely drastic measure. I haven’t seen that too many times,” he said. “There will be some opportunity for us, but maybe a little bit later.”
Property funds overseeing about 18 billion pounds of assets froze investor redemptions last week to preserve cash levels and avoid a fire sale of commercial real estate assets. That came as analysts warned that London office values could fall by as much as 20 percent within three years of the country leaving the EU.
Asian investors are the largest international group with direct real estate investments in the U.K., according to Jones Lang LaSalle Inc., including developers such as Dalian Wanda Commercial Properties Co., China Vanke Co. and Oxley Holdings Ltd. Hong Kong-based Great Eagle, which owns The Langham, London, had been negotiating to buy private land in London’s trendy Shoreditch neighborhood to build an Eaton Hotel, part of the group’s lifestyle brand.
"I need to be in London, but for now I am going to pass and see what happens," Lo said.