Ho Bee buys London office property for £99m

PROPERTY developer Ho Bee Land said on Tuesday morning that it has bought its sixth prime office property in London for £99 million (S$210 million).

Ho Bee is buying the freehold property known as Apollo House and Lunar House at Wellesley Road in the Croydon area of South London.

This comprises two office buildings of 20 storeys and 22 storeys, providing total 441,797 square feet of office accommodation. The buildings were constructed in the late 1960s and underwent a phased refurbishment programme in 1995 and 2000, Ho Bee said.

"The property is currently let in its entirety to the British Government in two separate leases until June 23, 2023. The total rent is approximately £5.521 million per annum reflecting a very low average rent of £12.50 per square foot, and hence highly reversionary," Ho Bee said.

It added there is a five yearly upward only rent review in December 2015 and December 2020. The annual rent reflects a net initial yield of 5.35 per cent after allowing for transaction costs, Ho Bee said.

Ho Bee added the property is in the centre of Croydon town and is a short distance between the East and West Croydon Railway Stations.

Chua Thian Poh, CEO and chairman of Ho Bee, said the acquisition increases the company's investments in the UK to £600 million in the last three years.

"This acquisition is unique as it offers us recurrent income till 2023. In the interim, it allows us ample time to plan and maximise the development potential of the site," he said.

Ho Bee traded on Monday unchanged at S$2 a share before the announcement was made.