Minting a new Chinese embassy

From cemetery to tobacco warehouse, China’s new London embassy has a varied history.

Few London sites can match the previous tenant rosters of the Royal Mint Court. Over the centuries, the property has housed an abbey, a tobacco warehouse and multinational companies. After the Chinese government purchased the site for reportedly at least £200 million ($266 million; €228 million) from a joint venture of private equity real estate firms Delancey and LRC group, it will next house diplomats.

Despite its classical finish and proximity to London’s financial district, the site was born in grimmer circumstances. The property was founded as an emergency cemetery in 1348, and its grounds were used quickly; within 18 months, half of London died from the Black Plague. A modern-day excavation revealed bodies piled into five-foot-deep mass graves on the site. In 1350, Edward III converted the cemetery to a Cistercian Abbey, St Mary De Grace. However, the abbey was dissolved in 1538, along with many other religious institutions following Henry VIII’s split with the Catholic Church.

The 5.2-acre site was then converted for various uses, including a residential building, a Royal Navy supply facility for almost 200 years and even a tobacco warehouse.

In 1798, a council under King George III proposed moving the Royal Mint to the site from the Tower of London, which had been its home for 500 years. During world war two, it produced more than 700 million coins annually as British workers abandoned bank notes for fear that the Nazis would use fake notes to disrupt the economy.

Mixing modern and historic

After almost 200 years in operation, the Royal Mint moved to Wales during the 1970s, as part of a cost-cutting exercise. The property was converted into office space in the 1980s, with tenants including bank Barclays, consultancy Deloitte and insurer Old Mutual. It mixed modern with historic, comprising more than 460,000 square feet of contemporary office space while offering views of Tower Bridge and the Tower of London.

In 1997, the Crown Estate, which manages property belonging to the British monarchy, bought the site from London-based Hermes Investment Management for an unreported sum, according to data provider Real Capital Analytics.

In 2002, Irish investors Tom Quinn and Donal O’Mahoney bought a 50 percent stake in the property for £95 million and secured an £85 million loan, per RCA. The Crown Estate sold its remaining 50 percent interest in 2009 to a fund advised by Delancey Real Estate Asset Management for £51 million. In 2014, the Irish partners sold their stake to a Cyprus-based investment firm called LRC Group.

Value-adding redevelopment at the site is in full flow but the asset is poised to change hands once again. Its incoming buyer has a wholly different purpose for it.

After an unsolicited offer from the People’s Republic of China, Delancey and LRC completed the sale of the property to the Chinese government in late May. Its plan is to convert the premises into its embassy in the city. The agreed price was undisclosed, but the South China Morning Post estimated it to be more than £200 million. Once renovations are complete, property company Savills, which brokered the deal, estimates the fortress-style embassy and cultural hub on the premises will be valued at £750 million. Neither the buyers nor the sellers could be reached for comment.

The Chinese move out of London’s West End is the latest by a major nation. In January, the US embassy moved to Nine Elms in South London from Grosvenor Square, its embassy for 60 years, which sat in the more central Mayfair.

Under the Chinese government, the Royal Mint Court site will again see a different set of tenants. What was once a place for burials and then a center for commerce will soon be recognized as a destination for diplomatic relations.