Ho Bee Land buys London office building for $228m

The Lombard Street office building benefits from excellent transport links with convenient access to the rest of central London, commuter destinations and London's airports.
The Lombard Street office building benefits from excellent transport links with convenient access to the rest of central London, commuter destinations and London's airports.PHOTO: HO BEE LAND

A unit of mainboard-listed Ho Bee Land has acquired a central London office building for £129.3 million (S$228 million).

The unit, Stream Field Investments, bought over Emmatown Properties, which owns the freehold office building at 67, Lombard Street, Ho Bee said in a statement on Tuesday.

The location of the building, which is about 100m away from the Bank of England and the Royal Exchange, benefits from excellent transport links with convenient access to the rest of central London, commuter destinations and London's airports.

The Grade A office building was redeveloped in 2014 behind a classic 1930s red-brick facade.

Occupying a virtual island site of 0.13ha, the property provides 93,640 sq ft of Grade A office space, a restaurant and ancillary accommodation arranged over basement, lower ground, ground, and eight upper floors.

The property is fully let to six tenants and over 50 per cent let by income to Arthur J. Gallagher, a Fortune 500 company.

It has a weighted average unexpired lease term of 10.2 years to expiry.

The current total annual rental income is about £5.3 million and the acquisition price reflects a net yield of about 4.1 per cent.

"The acquisition is part of the group's capital re-investment plan to upgrade its portfolio of London investment properties following the group's divestment of Rose Court in February this year," said Ho Bee chairman and chief executive Chua Thian Poh.

Ho Bee's asset portfolio in London now comprises six commercial buildings with a total investment value of about £645.8 million.

"The average leases of our London portfolio are more than five years and this will enable us to ride through the uncertainties from the Brexit negotiations over the next two to three years. In the longer term, we believe London will continue to thrive as a global financial city," Mr Chua noted.

Ho Bee shares yesterday ended a cent lower at $2.40.

A version of this article appeared in the print edition of The Straits Times on June 22, 2017, with the headline 'Ho Bee Land buys London office building for $228m'. Print Edition | Subscribe