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'Walkie Talkie' bought by Hong Kong family business for record £1.3 billion

City of London
By Alexandra Newlove

A Hong Kong family company best known for its oyster sauce is the latest in a series of Asian investors snapping up London landmarks, as it executes a £1.3 billion ($1.7 billion) deal for the city's “Walkie Talkie” building.

LKK Health Products Group, which makes Lee Kum Kee Oyster Sauce, has agreed to buy the 37-storey City of London tower – officially named 20 Fenchurch Street but more commonly referred to as the “Walkie Talkie” thanks to its bulbous design.

Cushman & Wakefield advised the group on the deal. The firm's head of London capital markets James Beckman described the agreement as “record-breaking”.

“Since the vote to leave the European Union, capital targeting London from the Asia-Pacific region has increased to record levels,” Beckman said.

He said while this was partly due to currency fluctuations and a weak sterling, he also saw it as a sign of “longer-term confidence in London and investment strategies which are not derailed by short-term political uncertainty”.

At $1.7 billion, the deal was the most expensive in London's history, with second place going to the $1.6 billion sale of 8 Canada Square to Qatar Investment Authority in December 2014. In March this year, the Leadenhall Building, known as the Cheesegrater, sold to Chinese investors for $1.15 billion.

The Lee Kum Kee Group, LKK Health's parent company, is controlled by 88-year-old Lee Man Tat. He is the grandson of Lee Kum Sheung, who was a chef at a small eatery in the Guangdong province of China, credited with inventing oyster sauce and the accompanying Lee Kum Kee brand back in the 1880s. Lee Man Tat is worth more than $2.5 billion, according to Forbes.

The Walkie Talkie was not listed for sale. Cushman & Wakefield said it “pre-empted” the marketing campaign from owners Canary Wharf Group and Landsec, who each have a 50% stake in the property. Landsec said it would return $829 million to its shareholders as a result of the sale, expected to be finalised this month.

LKK Health Products issued a press release which said the sale would bring in “reasonable” rental income and extend the group's property portfolio into a major financial centre. It said the property was a “long term investment”.

The Walkie Talkie has a brief but colourful history and is a divisive piece of the London skyline. Completed in 2014 by the outgoing owners, it made headlines even before it was fully finished when refracted light from the glossy building melted parts of a Jaguar parked nearby.

An imaginative reporter then used the building's reflected rays to fry an egg, dubbing it the Walkie Scorchie. Other newspapers opted for “the Fryscraper”.

Shade screens were erected on the building after further reportsof doormats catching fire, scorched carpets, spoiled products in nearby shops and the creation of a tropical “microclimate” on the south side of the building.

The building has more than 66,000 sq m of floor space and is topped by the three-storey Sky Garden restaurant and bar, which has 360-degree views of London.