Hotel Properties takes 30% stake in vehicle to buy properties in central London

SINGAPORE - Hotel Properties Ltd (HPL) has inked a deal to expand its property portfolio in Southbank, Central London.

The purchase is made by a newly formed company, Bankside Quarter (Jersey) Ltd (BQJ), in which the Singapore-listed company had taken a 30 per cent stake.

Under the deal, BQJ has agreed to to purchase the freehold interest in the properties from The Carlyle Group for £308 million (S$627.4 million).

The purchase shall be paid in two separate tranches, with the initial 5 per cent or £15.4 million paid on the date of the sale and purchase agreement.

The remaining 95 per cent or £292.6 million will be paid on the date of completion of sale, expected in May.

It is intended that HPL's share of the investment in BQJ for the acquisition of the properties shall be funded by way of a combination of third-party loan financing and internal resources, HPL said in a statement on March 28.

The properties are located in Bankside.

The freehold site is broadly rectangular in shape and occupies about 5.3 acres, including the area of a viaduct that bisects the site.

They comprise Ludgate House and Sampson House, two existing office buildings, and Falcon Point, a neighbouring residential building let on long-leasehold interest to the London Borough of Southwark.

Ludgate House, a ground plus nine-storey building occupying a land area of 1.41 acres, comprises some 171,678 sq ft of net internal area (NIA) of office accommodation.

Ludgate House was let to United Business Media until March 2015.

Sampson House, a basement, ground plus six-storey building occupying a land area of 2.13 acres, comprises some 354, 602 sq ft of NIA of office accommodation.

It is currently let to IBM until December 2025, albeit with a mutual break in June 2018.

The properties are being acquired with the benefit of an implementable existing planning permission obtained by The Carlyle Group, comprising about 52,000 sq ft NIA of private residential accommodation, 285,000 sq ft NIA of offices and 36,000 sq ft of retail and leisure space.

It is intended that following completion of the acquisition of the properties, BQJ shall further review and evaluate the plans for the properties.

The Southbank has historically been recognised as one of the central London's leading cultural hubs, being home to the capital's most famous institutions including the Royal Festival Hall, Tate Modern and National Theatre.

More recently, the area has undergone significant transformation, becoming one the Central London's fastest growing business and residential locations, providing a more vibrant and fashionable alternative to the traditional markets of the City and West End.

Bankside is centrally located at the heart of the SouthBank and Bankside Cultural Quarter.

On the south side of the River Thames, opposite the City of London and equidistant from London Bridge; Bankside's central location makes it very accessible, served by major rail and underground connections at London Bridge, Waterloo, Southwark and Blackfriars stations.

The new Blackfriars' Station southern entrance provides direct access to Bankside.