A private Hong Kong property company is in advanced talks to buy a £350M Midtown office block from Landsec, in one of the largest London deals to complete since interest rates spiked in the second half of the year.

Chinachem is under offer to buy 1 New Street Square from Landsec, the UK’s second-largest REIT, CoStar reported. Deloitte has a lease on the 275K SF office until 2036.

The deal is the second undertaken by Chinachem in London in the space of three months. In September it announced it had completed a deal to buy the 89K SF Kaleidoscope office building in Farringdon from Helical for £159M.

A Knight Frank report said that 88% of central London office deals completed since the 23 September mini-budget had been undertaken by private buyers rather than public REITs or institutional investors.

How a price of £350M compares to the book value of the asset is not publicly known. In early September Landsec sold 21 Moorfield to an Australian joint venture for £800M, below the roughly £950M at which it was originally marketed. Chief executive Mark Allan said that if that sale had closed after the mini-budget the price would have been lower.

When Allan arrived as CEO in 2020 the firm said it wanted to sell £4B of stabilised assets, and it has now sold about £2B.

Knight Frank’s data showed there were 20 central London office deals in the two months following the mini-budget, a historically low figure.

Private investors like Chinachem have typically been the first to invest in London in periods of uncertainty, such as following the Brexit vote in 2016, as they are less beholden to risk-averse credit committees.

Chinachem started life as a Hong Kong chemical company in the 1960s, and diversified into residential and then commercial property as the island began to expand and became an Asian financial hub. It is led by chief executive Donald Choi.