Prime portfolio of London property fetches just pounds 51m: Li family buys Langham Estate from Grovewood receivers

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The Independent Online
THE Langham Estate, one of London's largest property portfolios, is to be bought by the Li family of Hong Kong for pounds 51m - less than a third of the value put on it at the height of the property market.

The estate comprises 142 properties on about 11 acres north of Oxford Street in the centre of London and includes buildings such as the Royal National Orthopaedic Hospital and C&A.

Most of the buildings are subject only to ground rent, although 15 to 20 are normal commercial leases, giving the estate an income of about pounds 4.5m.

This is the second attempt by the Li family to purchase the estate. Earlier this year, they made a lower offer, but were trumped by Capital Trust, a Middle-Eastern backed fund management group based in Mayfair. But that deal collapsed in October and Mr Li was invited to bid again.

Alan Barrett, of Price Waterhouse, who is receiver to Grovewood Securities, which owned the estate, said that the recovery in the property market had encouraged new bidders after the Capital Trust deal collapsed. Among others believed to be interested was Helical Bar, the property company led by Michael Slade.

Because the Li family had already carried out most of their investigations, however, they were able to arrange the deal quickly. It is due to be completed on 25 January, the birthday of the younger Mr Li.

Far Eastern buyers have been active in the property market recently, encouraged by the decline in prices since the market peak in 1989. County Hall, the former Greater London Council headquarters, is being acquired by the Japanese company Shirayama while Battersea Power Station is being bought by the Taiwanese Hwang family.

The sale is the latest in a series of changes of ownership for the Langham Estate. It was bought by Priest Marians, the property company, in 1987 from the Water Authorities Superannuation fund for pounds 87m. In 1989 it was valued by Priest's surveyors, Jones Lang Wootton, at pounds 175m. A year later Priest, struggling under pounds 132m of debt, was bought by Grovewood Securities - which was trying to turn itself into a property investment company - for only pounds 5m.

The rescue failed a year later, however, when Grovewood itself went into receivership with debts of more than pounds 100m.

Mr Barrett has already sold most of Grovewood's other interests, including the manufacturing operations such as Early's of Witney, the Oxfordshire blanket maker. The Langham sale would still leave lenders to the group with a 'significant shortfall', he said, and there would be no return for shareholders.