Posted on 02/07/2008 6:44:34 AM PST by TigerLikesRooster
Queen sells landmark to Dubai fund
By Daniel Thomas
Wed Feb 6, 8:15 PM ET
Sovereign wealth funds from the Middle East are benefiting from the sovereign's wealth - by buying a landmark West End building from the Crown Estate.
On Wednesday, a consortium backed by Istithmar, the property arm of the Dubai government, paid £130m ($255m) for the 130-year-old Metropole building in London which was part of the Queen's property portfolio.
The sale is the latest signal of the forces now driving the capital's property market - no longer the "old money" of the aristocratic estates but the newer money of overseas sovereign wealth funds and private property speculators.
The Metropole sale comes just a week after the Qatari government completed a £959m deal to acquire the Chelsea Barracks, the former military headquarters near Sloane Square, in a joint venture with developer Candy & Candy.
The Metropole was bought by a consortium led by International Hotel Investments, in which Istithmar Hotels is the principal shareholder. Istithmar is part of Dubai World, the company controlled by the ruling family, which bought P&O.
The building, which opened as a hotel in 1883 but was occupied as offices by the Ministry of Defence until 2004, will be converted into a luxury hotel and residential development.
Charles Gardner, head of the office portfolio at the Crown Estate, said: "IHI's bid stood out ... [its] proposal to refurbish the building rather than rebuild behind the existing façade."
Istithmar has been an active buyer of property in the UK and, like many Middle Eastern investors, favours so-called "trophy" buildings in the West End. The Dubai state already owns the nearby Adelphi building at 1 Trafalgar Square and, in 2006, tried to buy Shell-Mex House.
John Stephen, chairman of property agent Jones Lang LaSalle in England, said: "There is a lot of money in the Middle East that is looking for safe havens, and will not be spooked by the world markets.
"[Istithmar] and other sovereign states are actively looking for UK property, and can see opportunities to buy now that there potentially wasn't in the rising market last year."
The Crown Estate is valued at over £7bn. Almost all of the property in London's Regent Street and Regent's Park belongs to the Crown Estate. Its revenue surplus is paid to the Exchequer.
Royalty, what a joke.
London’s Real Estate is so over priced...the Queen got a good deal and will probably be able to buy it back for 50% in a few years...(just like we did to the Japanese in the 1980 with NYC Real Estate)
The Crown Estates are not controlled by the Queen. As is tradition, she signed over control of the Crown Estates to the government in return for an annual payment called the Civil List.
The land was sold by the government, the Queen was not involved in the transaction.
...
"[Istithmar] and other sovereign states are actively looking for UK property, and can see opportunities to buy now that there potentially wasn't in the rising market last year."
If the market is no longer rising I doubt they are speculators.
Agreed.
Foreigners typically don’t do good land deals. Yes, it is momentarily depressing, but at the end of the day, the good guys come out ahead on these deals (ie, the buy back).
Let us just say the real estate bubble in the UK and most of the rest of Europe (with the notable exception of Germany) makes the RE bubble in the USA look like a kiddie party. And it is about to burst!
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