April 5 (Reuters) - China's R&F Properties has
agreed to buy the Vauxhall Square development in central London
from CLS Holdings for a gross 157.77 million pounds
($197 million), a boost to the capital's faltering luxury
residential property market.
The scheme, including two 50 storey residential towers, is
one of a number of developments in London designed to cash in on
demand for high-end properties from foreign buyers ranging from
Russian oligarchs and Middle Eastern oil barons to newly-minted
However, prospects for the market have dimmed over the last
year, with prices for luxury flats falling sharply due to
uncertainty over Britain's vote to leave the European Union and
changes in sales tax.
Developers, grappling with oversupply, have had to sell
entire apartment blocks for discounted prices and change
Last month, St Modwen said a potential buyer of its
up-for-sale 10 acre Nine Elms Square residential scheme had
allowed its period of exclusivity to expire. It had already
written down the value of the site last year.
Nonetheless, a sharp fall in the value of the pound since
the Brexit vote has raised hopes that foreign buyers will return
CLS said it would make a profit on the sale of around 40
million pounds after costs. Its shares were up 6.2 percent at
1,859 pence at 1415 GMT, the second biggest rise on Britain's
midcap share index.
"The deal highlights the depth of international capital
tracking UK real estate, removes a perceived higher risk asset
from CLS' portfolio and provides significant capital to reinvest
in core high yielding offices," Liberum analysts said.
R&F will assume some obligations and pay net cash of 144.1
million pounds, CLS said.
($1 = 0.8008 pounds)
(Reporting by Esha Vaish in Bengaluru; Editing by Mark Potter)