In what can be considered as China's biggest investment in the United Kingdom's real estate market, Chinese realty firm CC Land has reportedly paid $1.462 billion to buy The Cheesegrater, London's tallest skyscraper.
According to an article from China Daily, this move shows the current general behavior of local developers. In the recent period, more and more firms are now "stepping out of the domestic market and getting yields from rental income instead of sales revenue."
The news was announced by property magnate Cheung Chung-kiu, who controls the Hong Kong-listed CC Land Holdings Ltd. He revealed that one of their company's subsidiaries has purchased The Cheesegrater located at 122 Leadenhall Street.
As of March 31, the 225-meter building has a market value of around $1.5 billion. It is jointly owned by Canada's Oxford Properties and British Land.
The Cheesegrater, with 46 floors and combined space of approximately 56,600 square meters, has a projected annual rental income of $52 million.
Apart from the London skyscraper, Chinese realty CC Land has also acquired other buildings in overseas markets for the past years.
In 2016, the firm purchased another building in London, the 12-floor, 50-meter high One Kingdom Street. The deal was said to be valued at $377 million.
CC Land has also bought a 34.55 percent share in an Australian office building for around $15.7 million.
In its annual 2016 results, CC Land shared that they are reforming their business strategies in a bid to set foot in the global market, eyeing to expand in key cities around the world.
Industry insiders shared that domestic firms are particularly eyeing for "trophy properties in prime markets" as they want to earn "steady, long-term yields from rental income," China Daily wrote.
Based on a report from property services provider JLL, 90 percent of Chinese mainland's total outbound realty investment is composed of investments in office buildings, hotels and land.
The research also cited London as one of the top investment targets of Chinese realty companies in the past three years. The U.K. city has attracted 16 percent of the outbound property investments of Chinese mainland. New York still holds the top spot, garnering around 18 percent of the total investments.