London's Walkie Talkie building sold for record-breaking £1.3 billion
London’s landmark Walkie Talkie building has broken records with its £1.3bn sale to a Hong Kong firm, best known for its production of oyster sauce. The deal easily surpasses the previous record price for a single building in the UK. The Qatar Investment Authority previously paid £1.17bn to acquire the HSBC tower in Canary Wharf in December 2014.
The controversial skyscraper, officially called 20 Fenchurch Street, is being bought by the property arm of Lee Kum Kee Health Products Group (LKK), a conglomerate that makes condiments and healthcare products, as well as developing property. LKK is a 129-year-old family business that specialises in oyster sauce, shrimp paste, and Chinese herbal medicine, and is controlled by 88-year-old billionaire Lee Man Tat. The price tag is the highest ever paid for a single UK building and the deal is expected to be completed by the end of August.
The Walkie Talkie building divided opinions prior to its completion in 2014. The building received a new nickname in 2013, quickly becoming called the Walkie Scorchie or the Fryscraper. This was due to the building’s south-facing glass façade, which channelled the sun’s rays into a beam of heat, strong enough to melt the bumper of a Jaguar, blister painted shopfronts and singe carpets. The heat was so intense that a journalist from a City newspaper even managed to fry an egg on the pavement. As a result of this, builders were forced to apply sun shading to resolve the issue.
The architect, Rafael Viñoly, said in an interview that he had predicted the building might reflect the sun’s rays on to the street below, but “didn’t realise it was going to be so hot”. He admitted that “a lot of mistakes” had been made with the Walkie Talkie that needed to be corrected.
The Walkie Talkie is the latest trophy London building to be bought by investors from China, South Korea, Singapore and Hong Kong, who, despite Brexit, are taking advantage of the low value of the pound to snap up property bargains in the capital. Chinese investors have spent £3.5bn on property in the City and the West End so far this year. This record-breaking deal demonstrates the enormous investor appetite in London, and in the City’s reputation as the global place to do business.
LKK has also purchased in the past year the glass-fronted 3 Harbour Exchange building in Docklands for £37m, and earlier this year the group tried and failed to buy the Gherkin. They also own and manage office and retail space in Guangzhou and Shanghai in China, as well as in central Hong Kong. The chairman of LKK Health Products Group has stated that they ‘are delighted to acquire 20 Fenchurch Street in central London to expand our global presence through strategic investments’.