This article first appeared in City & Country, The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

Gamuda Bhd (KL:GAMUDA) unveiled its largest project in the UK on Jan 15 with a groundbreaking ceremony for the £1.2 billion (RM6.6 billion) redevelopment of 75 London Wall. Gamuda and its London-based joint-venture partner, real estate investor Castleforge, acquired the landmark in the City of London, formerly known as Winchester House and the UK headquarters of Deutsche Bank, in a 75:25 joint venture in February 2023.

They received full planning consent to redevelop the iconic office building in June last year to increase the building capacity by 40%. Construction has begun and about 89% of the existing structure, including the lower-level façades, will be retained.

Led by Gamuda group managing director Datuk Lin Yun Ling and Castleforge founding partner Michael Kovacs, the groundbreaking ceremony in London was also attended by head of investor relations for the UK government Gus Wiseman and deputy London mayor Howard Dawber. Financiers, property agents as well as property development and built environment specialists were among the 80-strong attendees.

In a media interview, Lin said the acquisition of 75 London Wall in 2023 stemmed from the “flight to quality” to top-grade office space in the real estate market.

“So when you have this ‘flight to quality’ [situation], what you see is a surge in demand for these [office] spaces, and 75 London Wall is exactly that. What you are seeing now in the market data is very strong rental growth in this top-end sector … it has to be [office spaces at] super prime locations,” he said.

He added that in the coming months, Gamuda and Castleforge will be in talks with potential tenants, especially multinational corporations that link quality workplaces to higher productivity.

“London is still and will continue to be the world centre for very high-end global services. All the major multinational [corporations] have a main office in the City of London, so London has always been the UK’s main exporter for these high-end global services.”

A presentation at the groundbreaking event indicated that investments in prime City of London offices have slowed down post-Covid due to higher inflation and interest rates. Therefore, supply of office space with the highest sustainability ratings in prime locations is lagging demand as evidenced by the surge in rental growth.

While London’s main export is still knowledge-based business services, as is evident from the array of global tenants in the city, quality space is critical to attract top talent and meet environmental, social and governance (ESG) goals.

“Global multinationals are willing to pay top dollar [for these quality office spaces that meet ESG goals]. Rental growth in ‘not-so-prime’ locations are subdued due to sufficient supply,” the presentation noted.

Kovacs expressed his belief that 75 London Wall will set a new benchmark for sustainable, expertly designed office developments in London.

“In an increasingly competitive landscape, we know that 75 London Wall will stand out as a true best-in-class office development for those who want to attract the best talent in and around our city,” he said.

Meanwhile, Wiseman highlighted that the investment will create a busy trading floor for the country’s world-leading financial services industry in years to come.

“This will create jobs in construction and, at full occupancy, will house over 5,000 workers. Redevelopment projects such as 75 London Wall are vital to this government’s mission to achieve the fastest growth in the G7 [Group of Seven],” he added.

The event also saw the signing of a £500 million property development loan between Gamuda and Castleforge with alternative investment manager Cheyne Capital. The loan is said to be one of London’s largest for property development in recent years. It is also Cheyne Capital’s second property development loan for 75 London Wall, after the initial £150 million loan for the acquisition of the building in 2023.

“We are delighted to extend our support to Gamuda and Castleforge with a £500 million loan for its redevelopment. At Cheyne, we remain committed to financing the creation of productive and sustainable assets to support the growth of the UK’s vibrant economy. We are therefore thrilled with the significant vote of confidence that Gamuda has shown in London,” says Cheyne Capital managing partner and chief investment officer Ravi Stickney.

Since its first venture into the UK — West Hampstead Central — in 2022, Gamuda has committed a total gross development value of £1.4 billion, encompassing prime commercial office assets, residential properties and purpose-built student accommodation (PBSA).

75 London Wall is its largest investment so far. The £72 million West Hampstead Central in London, which was practically completed in October 2024, has seen 94 apartments — or 98% — being sold. The seven remaining units are predominantly one bedders.

Another project is a PBSA currently under construction in Woolwich, London. Lin noted 

that progress on the 15-storey development is ahead of schedule with cores completed and concrete frame progressing to Level Three. “The procurement is going well and we anticipate the site will have no issues in terms of being complete and ready for students in time for the 2026/27 academic year.”

At the same time, Gamuda also has an upcoming residential project in Aldgate, which is currently in the development planning stage.

Lin reckoned that Gamuda’s focus in the UK property market will be PBSA in cities with a huge overseas student population. The company plans to deliver 1,500 beds by 2026 and another 1,500 the following year in London, Glasgow and Bristol.

“Our main focus in the immediate term is the PBSA sector. We have spent a long time understanding the market and reviewed hundreds of student sites. Our Woolwich site is underway and has just received resolution to grant on a second phase, increasing the total bed numbers to 419 units,” he said.

“Furthermore, we have been open about our target cities, namely Glasgow and Bristol. We are close to transacting on a large site in Glasgow and will share details on this later in the month. Bristol, meanwhile, has been a focus area; it’s early days yet but there is an opportunity under review.”

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