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Hong Kong Billionaire Bets on Rentals Amid Slow London Sales

Hong Kong Billionaire Pivots to Rentals as London Sales Stagnate

(Bloomberg) -- Billionaire Henry Cheng Kar-Shun’s development company plans to build rental homes for the first time at its Greenwich Peninsula project in east London amid the capital’s sluggish sales market.

Knight Dragon has partnered with Dallas-based Lincoln Property Company and U.K. real estate investor MGT to build 500 rental apartments at the giant project located across the River Thames from the Canary Wharf financial district, according to a company statement on Wednesday.

A series of tax hikes on high-end homes, coupled with Brexit uncertainty, have prompted the U.K.’s biggest developers to retreat from London’s pricier central districts. Those with projects in the works have increasingly turned to bulk sales to rental investors instead of waiting around to sell individual apartments. About half of the homes being built in London remained unsold at the end of last year, according to researcher Molior.

“As a 20-year regeneration, we are consistently evolving our approach to respond to market demand,” Knight Dragon Chief Executive Officer Richard Margree said in the statement.

The Greenwich Peninsula project could eventually include almost 17,500 homes spread over a 150-acre chunk of land. So far Knight Dragon has built more than 1,000 apartments in the Upper Riverside phase of the project, and over 2,500 in total. It has also completed an events venue, school and part of a public walkway designed by the architects behind New York’s High Line.

Construction of the rental units will begin later this year if planning permission is granted, according to the statement.

Introducing rentals to Greenwich Peninsula “allows us to bring forward more homes more quickly across this major regeneration and maintain the positive pace of development we have established,” Margree said.

Cheng also controls New World Development, the real estate and infrastructure giant established by father Cheng Yu-Tung, who died in 2016. He has a net worth of $16.9 billion, according to the Bloomberg Billionaires Index.

Hong Kong Billionaire Bets on Rentals Amid Slow London Sales

To contact the reporter on this story: Jack Sidders in London at jsidders@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry, Chris Bourke

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