Crosstree Portfolio - One Nine Elms

Chinese developer exchanges on £1.3bn Nine Elms development

Chinese developer Guangzhou R&F Properties has exchanged contracts on the sale of its One Nine Elms development in Battersea, confirming an earlier report by React News.

According to an announcement issued on the Hong Kong Stock Exchange on 15 April, the company had entered into the agreement with CC Land chairman Cheung Chung-ku after securing the lenders’ consent. Completion of the transaction is expected by mid-May.

R&F Properties agreed to offload the mixed-use project for £640m to CC Land -a significant discount to its latest valuation of more than £1bn at the end of December. The transaction was revealed by React News.

One Nine Elms comprises the 57-storey City tower and 42-storey River tower, both currently under construction. The City tower will have 334 homes for sale, while the River tower will host a 203-bedroom Park Hyatt hotel -the first in the UK-and 103 Park Hyatt-branded luxury apartments.

The project, which has a gross development value of more than £1.3bn, also includes 57 affordable homes forward sold to Thames Valley Housing.

The disposal follows R&F securing a £772m financing package, originated by Precis Capital Partners along with lenders including Apollo Global Management, Carlyle and Crosstree Real Estate Partners.

It considered selling off the asset in May 2022, including Queen’s Square, the refurbishment of the former Nestle Tower in Croydon, first reported by React News. Work had stalled on both the £500m Queen’s Square and £900m One Nine Elms at the time, after workers walked off the sites over payment issues.

Since securing the loan, R&F has struggled to meet key residential sales milestones which form part of the conditions of the debt facility. The risk of defaulting on the loan is understood to be the main driver of the sale.

As laid out in a company interim report last year, R&F has expedited its plan to sell development and investment properties in China and overseas, reallocating capital to address financial liabilities and project completions.

The deal is not R&F’s first tie-up with CC Land. In the second quarter of 2022, R&F agreed to sell its 50% stake in the Thames City development in Nine Elms to CC Land for £270m (HK$2.66bn), representing a £190m loss for the former on its initial investment.

17 April 2024 | May Agaran, James Buckley | React News