London/Mumbai: Mumbai-based Lodha Developers on Friday acquired iconic Macdonald House that houses the Canadian High Commission in central London for over 300 million pounds (over Rs 3,000 crore) and said it would expand presence in the UK property market to encash opportunities.
"Lodha Group has exchanged contracts to acquire the landmark MacDonald House in Prime Central London from the Canadian government for a consideration of over GBP 300 million (over Rs 3,000 crore)," Lodha said in a statement.
The acquisition marks foray of Lodha Group into the UK real estate market. This is the third major asset purchase by the privately held firm in over last one year.
Lodha had bought 17 acres of land in Mumbai from DLF for Rs 2,727 crore and also Washington House property from the US government on Altamount Road in Mumbai for about Rs 375 crore.
Canada's High Commissioner to the UK, Gordon Campbell, confirmed last night that legal contracts have been exchanged for the sale of 1 Grosvenor Square for 530 million Canadian dollars.
"We thank Lodha Group for their keen interest and welcome this new phase in the project," Campbell said.
The High Commission said Lodha will acquire the property, which offers 1.5 lakh sqft of developable area.
"The acquisition of this marquee asset overlooking London's most renowned garden square, in the heart of Mayfair, and in close proximity to Bond Street and Mount Street is a great opportunity for our company," Lodha Group Managing Director Abhishek Lodha said.
Meanwhile, Lodha Deputy MD Abhinandan Lodha said it plans to focus on Mumbai and London. The firm sees great opportunity in the UK and would like to expand its presence in the region.
"The deal will be completely through internal accruals. We have already made payment of the first tranche of Rs 300 crore and the rest we intend to pay before March next year," he told reporters in Mumbai.
Lodha has cash funds of Rs 14,500 crore from sales in last 18-19 months and earned revenue of Rs 8,700 crore in FY13. He said no plan has been finalised on development of the property acquired.
"We have not yet finalised our plan - whether we will go for a commercial or residential buildings. The area caters to high- end residential and commercial segments. We may have a plan in next three months," Lodha said.
The value of Macdonald House, if converted to residential use, is estimated at over 450 million pounds. "London and Britain offer significant opportunities for us. London fits the criteria of global city and resilient and mature market for growth of both residential as well as commercial real estate. We would like to further expand our presence in this region," Lodha told reporters in Mumbai.
He said the company had been working on the mega deal since the last one month. A number of global players were in the fray to acquire this property.
"We had been working on its for over a month. But looking at the potential of this market, we set up shop in London almost a year ago," Lodha said.
The group has appointed Tyler Goodwin, former Managing Director of JP Morgan Asset Management's Global Real Assets Division, as Chief Executive Officer to take care of the London business, he added.
Lodha Group, a leading realty firm in India, had net sales of over Rs 8,700 crore in 2012-13. It is developing 35 million sq ft area in over 20 projects in Mumbai, Pune and Hyderabad.
Canada had first announced its intention to sell the property in February. It has described the move as a key step in plans to revitalise Canada House on Trafalgar Square in the heart of London and to consolidate the Canadian High Commission's diplomatic activity in the UK in one central London location, "saving valuable operational dollars".
"There was exceptional interest from international parties for the property on Grosvenor Square. We are looking forward to move to Canada House on Trafalgar Square, Canada's traditional home in the United Kingdom, in the next year," Campbell said.
"This is without doubt one of the finest addresses in central London," Tim Whitmey, director in Savills development team, said. Savills advised Candaian High Commission in this deal.
