Canada sells London mansion office for $530 million

Canada will register a net gain of up to $200 million, and save money each year on operational costs, through the sale of one of its two diplomatic buildings in London, Canadian High Commissioner Gordon Campbell said Thursday.

An Indian developer’s purchase of Macdonald House at One Grosvenor Square for $530 million also will allow for an expansion and renovation of Canada House, which will become the single diplomatic headquarters, the former B.C. premier said in an interview.

“The whole idea was to make Canada House the star of Canada’s show right here in the heart of London on Trafalgar Square,” Campbell said.

“This is the best possible value Canadians can get for this property and it will allow us to reduce our operating costs by about a half, and we’ll probably send between $150 million to $200 million home.”

London has become a favoured destination of deep-pocketed Russian oligarchs looking for property, which has led some to pejoratively label the city Londongrad. Relations between the U.S. and Russia soured over the last year because of Moscow’s decision to grant asylum to Edward Snowden, the National Security Agency leaker that Washington wanted to prosecute.

“We had over 106 tours of the actual property by international investors from all over the world,” Campbell told The Canadian Press from London.

“We had a whole matrix of decisions we had to go through, including best value, lowest risk, any security risks certainly were all pursued.”

In the end, Campbell said, the property was sold to the highest bidder.

“We had lots of very good bidders and this was the highest evaluated bid that we had, and it’s a very good bid for Canada.”

Campbell said the consolidation of the diplomatic mission at Canada House would mark the return to “Canada’s traditional home in the United Kingdom.”

Once the renovation of Canada House is paid for, the sale of One Grosvenor Square will return between $150 million and $200 million back to the central treasury, Campbell said.

Campbell wouldn’t say what Lodha had planned for the building.

“One of the things that we decided as a government is that we’re not in the development business. We’re in the business of maximizing the benefits for Canada’s taxpayers,” he said.

Foreign Affairs announced its plan to sell off diplomatic residences in March 2012 as part of a $170-million, cost-saving effort.

But analysts have said the plan would hurt Canadian diplomacy as the government seeks to deepen trade.

The deal came one day after the government, with great fanfare, announced a new foreign policy direction that will see diplomats focusing on advancing the country’s commercial interests in emerging markets such as China, India and Brazil.

Fen Hampson, director of the global security program at the Centre for International Governance Innovation in Waterloo, Ont., said no matter how the government spins it, the London sale amounts to a reduction of Canada’s diplomatic footprint in London.

He said the deal was “symptomatic of the power of emerging markets.”

Abhishek Lodha, managing Director of Lodha Group, gushed over the potential of the project.

“The acquisition of this marquee asset overlooking London’s most renowned garden square, in the heart of Mayfair, and in close proximity to Bond Street and Mount Street is a great opportunity for our company,” he said in a statement.

Other potential diplomatic properties that Canada could sell include the apartments in New York City that house Canada’s ambassador to the United Nations as well as posh properties in The Netherlands, South Korea and Italy.

Agencies