Property developer Ho Bee Land has agreed to buy a freehold property in London for 171 million pounds (S$361.5 million).

The property, 1 St Martin's Le Grand, is located to the west of the core of the City of London, about 200m north of the London Stock Exchange, Ho Bee said on Friday.

It has about 276,792 sq ft of Grade A office and accommodation space over 11 levels, including a basement. The purchase price works out to about 618 pounds per sq ft.

The building is currently leased to five tenants: Mitsui & Co Europe, Pyramis Global Advisors, Julius Baer International, SS&C Technologies and Nomura International. The average lease is eight years before break options and 12 years before expiry.

Ho Bee said it is buying the building as a long-term investment for recurring income. Total annual rentals are more than 9.9 million pounds, reflecting a net yield of 5.5 per cent, the company said.

This is Ho Bee's second major acquisition in the City of London, after it bought Rose Court in May last year for 67.2 million pounds.

It is a sign of Ho Bee's "confidence in the London office market which is strengthening rapidly in tandem with the improving UK economy", said the company's chairman and chief executive officer Chua Thian Poh.

"The acquisition is part and parcel of the group's continuing diversification overseas in times when the local market is facing very strong headwinds with limited investment opportunities," he added.

The transaction is not expected to have a material impact on Ho Bee's financials for the current financial year.