In its first venture outside Indian property company Lodha has purchased the Canadian High Commission building in London for £306m.
The Mumbai-based group beat off six rivals — including bidders from the Middle East, Asia and Russia— to snap up the iconic MacDonald House in London’s Grosvenor Square. The deal gives the company its first toehold in the global property market.
The former American embassy, Canada bought the building from the US government in the late 1960s after the notorious Grosvenor Square riots. The 160,000sq ft Mayfair property was renamed after Canada’s first Prime Minister, Sir John MacDonald, and since then has been the home-cum-office of more than a dozen High Commissioners.
The Canadian government announced in February that it was putting its London diplomatic site on the market to reduce costs. The listing took place in October with the seven-storey building generating more than 100 viewings and 20 bids.
Located in one of the most desirable areas of London, Lodha is planning to convert the building into a high-end residential property. Work is not expected to start until the middle of next year.
“Lodha clearly has the scale to go overseas and develop a property in a mature market and create an international brand,” said Sanjay Dutt, of Cushman and Wakefield.
Lodha reportedly financed the deal in-house. The entire £306m is said to have been paid within minutes of the signature via internal accruals and with the group not taking on any debt to fund the purchase.
“The acquisition of this marquee asset overlooking London’s most renowned garden square and in close proximity to Bond Street and Mount Street is a great opportunity for our company,” said Abhishek Lodha, the group’s managing director. “Grosvenor Square is the best address in the world and we will create a world class luxury development which benefits the status of the address.”
It’s a sentiment obviously shared by other sub-continent investors, at least six properties on Grosvenor Square have recently been bought by Indian companies or businessmen.
As the world of international diplomacy changes, more and more countries are selling off or downsizing their embassies and consulates. In the last twelve months alone 20 diplomatic houses or buildings in London have been sold or are on the verge of being disposed of. The average price of Mayfair properties is around £21.3m and most of the diplomatic property sold since 2012 has been bought by wealthy foreigners.
Established in 1980, the Lodha Group is one of India’s biggest real estate companies. It is currently developing more than 35m sq ft of retail and residential projects including Mumbai’s landmark World One, the country’s tallest residential tower block.
Although MacDonald House is its first purchase outside India it has a history of acquiring and converting diplomatic property. Last December, Lodha bought Washington House, the staff quarters of the US consulate in Mumbai.
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