Lloyds share price: Group set to offload London headquarters

Lloyds Banking Group (LON:LLOY) is poised to sell off its City of London headquarters in a sale-and-leaseback deal, the Financial Times has reported. The move would allow the bailed-out lender to take advantage of a property market buoyed by an influx of Chinese buyers.

Lloyds’ share price has climbed into positive territory in London in today’s session, having added 0.39 percent to 63.70p as of 14:47 BST. The advance is largely in line with gains in the broader UK market, with the blue-chip FTSE 100 index currently standing 0.51 percent higher at 7,374.52 points. The group’s shares have added some eight percent to their value over the past year, and are up by just under two percent in the year-to-date.

Sources with knowledge of the matter told the FT this week that Lloyds was preparing to bring its City of London headquarters to market, but had not yet done so. The FTSE 100 bank, bailed-out by the UK government during the financial crisis and recently returned to full private ownership, is one of the last leading UK lenders to retain ownership of its London headquarters, with most others opting for leases.

Agents familiar with the building at 25 Gresham Street in the City further told the newspaper that Lloyds could make between £140 million and £150 million from such a deal. It, however, does not intend to move out of the building, but would negotiate a long lease with any potential buyer.

The FT notes that despite concerns about the London property market following last year’s Brexit vote, investor demand for office buildings has been strong in recent months, largely thanks to outbound Chinese capital, with Chinese and Hong Kong buyers having put nearly £4 billion into London real estate in the first half of this year, according to the property advisers CBRE.

As of 15:00 BST, Wednesday, 30 August, Lloyds Banking Group share price is 63.66.