Chinese Group Is Said Near Deal to Buy Lloyds Bank London HQ
(Bloomberg) -- Lloyds Banking Group Plc is in exclusive talks to sell and lease back its City of London headquarters to a company linked to China’s Hengli Group, two people with knowledge of the deal said.
The Chinese conglomerate offered about 150 million pounds ($198 million) for the 25 Gresham Street building, the people said, asking not to be identified because the deal’s terms have yet to be finalized. Lloyds, which is being advised by broker CBRE Group Inc., will commit to a new long-term lease on the building, they said.
A spokesman for Lloyds declined to comment. Hengli didn’t respond to phone calls seeking comment outside normal business hours.
Chinese investors have poured into London’s real estate market following last year’s Brexit vote, focusing in particular on buildings with long leases in the City of London financial district. Companies with large offices in the U.K. capital, including Anglo American Plc and KPMG LLP, have sought to take advantage of the demand with sale-and-leaseback deals.
The 25 Gresham Street building, which has about 120,000 square feet (11,150 square meters) of office space, is one of several large properties that Lloyds occupies in the City of London. Lloyds plans to cut its office portfolio by about 30 percent, which should result in one-time savings of 100 million pounds as well as annual savings of 100 million pounds from the end of 2018, the company said in 2016.
The aim of the restructuring is to modernize the company’s working practices in addition to generating savings.
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