Tycoon bets £213m on St James’s

Billionaire casino tycoon Stanley Ho is to buy the building that holds the record for the highest office rent paid in the UK for around £213m – a 3.75% yield. Ho’s Shun Tak Group is in exclusive talks to buy Green Property Ventures’ 7-8 St James’s Square, SW1, in a move that will bring an end to Green’s ownership of a portfolio once owned by convicted fraudster Achilleas Kallakis. The move will fuel speculation that the Ho family – he chairs Shun Tak while his daughter Pansy is managing director – will increase its exposure to London real estate. Stephen Vernon and Pat Gunne’s private firm appointed CBRE to start formally marketing 7-8 St James’s Square in October after it received unsolicited interest from investors. The average rent in the Eric Parry-designed, 62,195 sq ft property is £125 per sq ft. The total income is £8m pa, including 18 months’ rent guarantee on the second and third floors, at £150 per sq ft and £120 per sq ft respectively. It is let to five tenants, including the Helly Nahmad Gallery, which agreed a record UK office rent when it took 2,959 sq ft at £185 per sq ft last April. Ho has been nicknamed the “King of Macau” for the 40-year monopoly he had on the island’s gambling industry. Shun Tak’s  core businesses are in property, transport, hospitality and investment and Ho is honorary life president of the Real Estate Developers Association of Hong Kong. Shun Tak Holdings has a property management portfolio of more than 10m sq ft in Hong Kong and Macau and has recently expanded into mainland China, with purchases in Beijing and Zhuhai, as well as into Singapore. Shun Tak is unrepresented. New rules expected to boost investment from Hong Kong China’s proposed changes to rules governing overseas investment are likely to fuel Hong Kong-based investors’ interest in UK assets. Proposals to block state-owned enterprises from buying more than $1bn of property in one overseas transaction, and lowering the threshold for transfers needing government permission from $50m to $5m, means “savvy investors” could move their money to neighbouring Hong Kong where restrictions would not apply, said Chris McCormick, European investment director, GAW Capital Partners. He added that getting money out of China this year has become harder due to restrictions already in place. Waiting for approval to transfer $5m is likely to overwhelm the system and lead to a “significant delay”, said Zachary Gauge, European real estate analyst at UBS Global Asset Management. James Shepherd, managing director of research at Cushman & Wakefield, China, said: “For private buyers of lower value properties a challenge will arise if there are any further restrictions on transference of personal funds overseas. In this scenario it is possible that appetite for UK property investment may remain but that the deal size would reduce.” • To send feedback, e-mail shekha.vyas@estatesgazette.com or tweet @ShekhaV or @estatesgazette