But High Commissioner Gordon Campbell said Canada managed to sell Macdonald House at One Grosvenor Square in London to the highest bidder, an Indian developer.
The Mumbai-based Lodha Group will take over the downtown property in London's posh Mayfair district in December 2014. The deal was announced Thursday after the Harper government declared its intention to sell it earlier this year.
Canada plans to consolidate its diplomatic activity at another historic property, Canada House on Trafalgar Square in the heart of London.
Campbell wouldn't say who else was interested in the Canadian property, but he hinted that the government was sensitive to the good neighbour it was leaving behind on Grosvenor Square — the U.S. embassy.
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.
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