SINGAPORE (THE BUSINESS TIMES) - Ho Bee Land is purchasing a commercial skyscraper in London belonging to United States insurance group WR Berkley for £718 million (S$1.3 billion).
The real estate group on Thursday (Feb 24) said it had paid a deposit of £35.9 million, with the balance payable upon completion on March 7.
Known as The Scalpel, the property is located at 52 Lime Street, which is adjacent to The Lloyd's of London. It stands at 206.5m in height and is built on a freehold site of about 0.31ha.
The building has a total of 406,000 sq ft of Grade A office space spread over 36 storeys, as well as three retail units at the ground and basement levels. It is predominantly multi-let to tenants from the insurance, financial, legal and tech sectors.
According to Ho Bee, The Scalpel's lease tenancies offer secure 10-year passing rent of £29 million, which translates to an attractive yield of 4 per cent.
Ho Bee intends to hold the property for the purposes of long-term investment. It will fund the acquisition through a combination of internal funds and bank borrowings.
The group expects its investment to contribute positively to its consolidated earnings per share and net tangible assets per share for the financial year ending Dec 31, 2022.
Chief executive Nicholas Chua said he sees the acquisition as a rare opportunity to acquire a landmark office tower which "ticks all the boxes for quality, distinction and sustainability".
"With this acquisition, our total investment in London would increase to more than £2 billion. The Scalpel's 10-year secure long-term income would further strengthen the group's recurrent income base," said Mr Chua in a press statement.
The Financial Times on Feb 22 reported that WR Berkley was looking to sign off on the deal with Ho Bee Land for roughly £820 million, citing sources familiar with the matter.
The Scalpel had been on the market since late 2020. FT noted that its sale would mark one of the largest office deals struck in Britain amid the pandemic.
Ho Bee Land shares rose five cents, or 1.8 per cent, to $2.85 as at 10.27am. The stock resumed trading on Thursday after a trading halt called on Wednesday morning.