BP nears sale of London HQ to Hong Kong department store operator

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– BP is nearing a deal to sell its London headquarters to a firm controlled by Thomas Lau, brother of Hong property billionaire Joseph Lau.

The oil giant is in advanced talks to sell the office building in historic St James’s Square to a company backed by Lifestyle International Holdings, according to people with knowledge of the matter. The Hong Kong has offered about £235 million (S$417.2 million) for the property, said the people, who asked not to be identified because the process is private.

The deal would be the first big real estate acquisition in the UK for Lifestyle International, whose chairman and largest shareholder is Mr Thomas Lau. His brother Joseph is already a major investor in London property through his development company Chinese Estates Holdings.

A BP spokesperson said the process of selling the building is ongoing and declined to comment further. A Lifestyle International spokesperson declined to comment.

BP plans to cut 10,000 jobs amid the slump in oil prices and transition to cleaner energy, with staff in office-based jobs and those holding senior roles most affected. The company is also moving to a mixture of home and office working as it adapts to the impact of the pandemic, according to the Sunday Times newspaper, which reported the start of the sales process in August.

OFFICE DEALS

About 500 people are housed in the St James’s Square office, including the board and executive management, according to BP’s website. The building has about 120,000 square feet (11,148 square metres) of space, according to real estate data provider EGi.

Some of the UK’s largest companies are planning to reduce the amount of office space they rent following the coronavirus crisis. Capita is vacating an office in London’s West End. Deloitte plans to close four of its 50 UK offices, according to the Financial Times.

Still, large companies from Netflix to Morgan Stanley are in the process of undertaking big office moves in London that show demand for the biggest and best buildings is recovering from lockdown lows. WR Berkley has kicked off the sale of its 36-storey London headquarters named The Scalpel in the city’s financial district, and asset manager DWS Group has put a £145 million office complex up for sale.

Lifestyle International operates some of Hong Kong’s best known retail outlets including the Sogo store. The company also owns most of the buildings from which its stores operate.

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