CDL completes £395 million acquisition of St Katharine Docks development

CITY Developments Limited (CDL) on Thursday (Mar 9) said it completed its acquisition of the St Katharine Docks development in London for £395 million (S$636 million). This translates to £751 per square foot (sq ft) on the existing net lettable area.

The deal increased the group’s total commercial assets in the UK to around £1 billion, while also enhancing the group’s recurring income stream, said CDL group chief executive Sherman Kwek.

St Katharine Docks, which opened in 1828, is a 23-acre (9.3 ha) mixed-used estate that fronts the River Thames. It comprises more than 500,000 sq ft of Grade A office, food and beverage, retail, and residential space spanning four main buildings and supporting ancillary spaces. This includes a marina with berths for up to 185 yachts.

The development attracts over 5.9 million visitors annually, CDL added.

Its office component has an occupancy rate of 90 per cent with a “well-diversified tenant base” across the consulting, shipping, education and co-working space sectors. These account for 92 per cent of the estate’s income.

“Since 2011, the estate underwent a £69.5 million repositioning and refurbishment programme, which included enhancements to the buildings, the marina and the overall estate,” CDL said.

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It noted that long-term income has been secured with an overall weighted average unexpired lease term of 8.2 years to lease breaks, and 9.4 years to lease expiries. Furthermore, the group identified “strong potential for positive rental reversion” and asset management opportunities to add value.

“CDL remains a long-term investor in the UK and has confidence in the fundamentals and resilience of the UK economy,” Kwek said.

The group funded the acquisition through its internal cash resources and credit facilities. It also disclosed that it bought the development from funds advised by asset manager Blackstone.

In January, the group confirmed that it was in discussions for the proposed acquisition, in its response to media reports. CoStar reported that CDL was in talks with Blackstone to acquire St Katharine Docks for around £400 million.