Canada sells its High Commission building in London for $530M

The federal government has sold Macdonald House — home to the Canadian High Commission offices and residence in central London — to an India-based developer for $530 million.

The Conservative government announced early this year it was putting Macdonald House on the block as it consolidates its diplomatic presence at Canada House in Trafalgar Square in downtown London. On Thursday, Canada’s High Commissioner to the United Kingdom, Gordon Campbell, confirmed the sale to Lodha Group.

“There was exceptional interest from international parties for the property on Grosvenor Square. We are looking forward to the move to Canada House on Trafalgar Square, Canada’s traditional home in the United Kingdom, in the next year,” Campbell said in a statement. “We thank Lodha Group for their keen interest and welcome this new phase in the project.”

The government hired real estate company Savills to sell the 150,000-square-foot Macdonald House, which had been expected to fetch more than $500 million because of its valuable location in the posh Mayfair area of London. It has been one of a number of lucrative assets the federal government has been looking at selling off as it promises to balance the books by 2015-16.

Finance Minister Jim Flaherty’s fall economic update released earlier this month projected the government will make at least $2.7 billion in asset sales over the next few years, including $700 million this fiscal year from its sale of 30 million General Motors shares in September.

Another $500 million in asset sales is expected in 2014-15 and $1.5 billion in 2015-16, including the expected selloff of Ridley Terminals (a bulk coal terminal in British Columbia) and the government’s remaining GM shares. The government is also considering selling the Dominion Coal Blocks, two parcels of Crown land in B.C.

Macdonald House has been the primary workspace for more than 200 Canadian diplomats in Britain, and houses the high commissioner’s living quarters. The government’s consolidation of offices in downtown London includes a multimillion-dollar makeover of Canada House and the recent $100-million acquisition of 2-4 Cockspur St., a large, 1920s-era office building conveniently located next door to the 190-year-old Canada House.