Hwa Hong buys stake in shop units near London's Tate Modern

SINGAPORE - Hwa Hong has agreed to buy a 50 per cent stake in five retail shop units in London, the Singapore-listed property company said on Wednesday.

It will make the acquisition via a limited liability partnership, in which it will invest 2.8 million pounds ($5.88 million) for a 50 per cent stake. London-based property developer Montrose Land and Developments will hold the other 50 per cent.

The total cost of the acquisition is about 10.25 million pounds and will be financed by the partnership's internal resources as well as bank borrowings.

The five shop units are located near the Tate Modern art gallery in the Southbank area of London and are part of a luxury residential project known as Neo Bankside.

"We believe that these properties, which are zoned for retail and certain food and beverage use, are strategically located in close proximity to the Tate Modern extension and will benefit from any future increase in visitors to the Tate Modern," said Hwa Hong's managing director Ong Choo Eng.

The units have a total floor area of about 14,399 sq ft and are within walking distance of the City of London office district, Hwa Hong said.

The developer also owns a stake in Block E Neo Bankside, a five-storey commercial building in the same area, which it acquired in November last year.

Hwa Hong said the acquisition is not expected to materially affect its earnings per share and net tangible assets for the current financial year.