LONDON (Reuters) - Lloyds Banking Group (LON:LLOY) said it has sold its London headquarters to a Chinese property investment company for an undisclosed price.
Under the terms of the sale to Hengli Investments Holding, Lloyds will lease back the 25 Gresham Street building, which it has occupied since its construction, for the next 20 years. The building sits in the heart of the City of London's financial district.
The sharp drop in the value of sterling following Britain's vote last year to leave the European Union has lured foreign investors into the British real estate market.
That coincided with plans outlined by Lloyds in 2016 to cut its non-branch property portfolio by 30 percent as part of a cost-cutting drive. It said at the time that the initiative would result in one-off savings of 100 million pounds and an additional 100 million pounds in run-rate savings by the end of 2018.
There will be no disruption to Lloyds' operations or staff in the building as a result of the sale, a spokeswoman said.
"The transaction enables the group to capitalise on the market conditions and realise value in its property portfolio for shareholders," she continued.
According to Savills (LON:SVS), a real estate agency that advised Hengli Investments Holding on the deal, the purchase of the 119,742 sq foot (11,124 sq m) building is the firm's first purchase in the UK.
Chen Chang Wei, chairman of Hengli Investments Holding, said the firm was pleased to have reached a deal on the property in less than a month, and that it would continue to consider other investment opportunities locally.