Great Eagle halts $330mn London plan

Bloomberg

Great Eagle Holdings Ltd. Chairman Lo Ka Shui said he has suspended plans for a £250 million ($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 UK 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 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 UK, 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 Hilton Hotel in 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.
Great Eagle Holdings Limited is a Chinese real estate company listed on the Hong Kong Stock Exchange. Through its subsidiaries, it engages in property investment and owns and operates various hotels.
The company operates in Hong Kong, North America, Europe and the Asia Pacific region. Currently, the company’s hotel portfolio comprises 13 properties with over 6,000 rooms, including 10 hotels branded under the Langham name in Hong Kong, Shanghai, London, Boston, Los Angeles, Melbourne and Auckland.