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Lodha set its sights on Macdonald House, in the heart of Mayfair and overlooking one of London’s renowned garden squares, because the company believed it was the best asset possible in the British capital, said deputy managing director Abhinandan Lodha. It also had the prestige of being a Canadian diplomatic property, he said.

“It was located in what we believe is the best location in London,” he said in a phone interview on Friday.

While it is too early to comment on the real estate developer’s plan for the historic site, Mr. Lodha said, “probably, we will try to maintain as much of the original building as possible.”

Lodha will need to work with local authorities to determine what their options are, but “it will probably be an extremely high-end, mixed-use kind of a development,” he added.

It will be at least another six to nine months before the Mumbai-based real estate developer will have a clear plan for Macdonald House, Mr. Lodha said.

The sale for 3,200 crore rupees, or roughly US$514-million, was earlier reported by CNBC-TV18 and Moneycontrol.com in Mumbai.

Macdonald House was in high demand, with more than 100 viewings and more than 20 bidders during the first round of bidding on Nov. 15, said Simon Stone, development director of Savills UK based in London who advised the Canadian government on the sale.

He would not disclose who the bidders were, but said they came from North America, Asia, the Middle East, as well as Europe and the U.K.