Ho Bee Land buys London office tower The Scalpel for £718m

HO Bee Land H13 : H13 0%is purchasing a commercial skyscraper in London belonging to US 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 Mar 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 206.5 metres in height and is built on a freehold site of about 0.31 hectare.

The building has a total of 406,000 square feet (sq ft) of Grade A office space spread over 36 storeys, as well as 3 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.

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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 officer 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 Chua in a press statement.

Financial Times (FT) on Feb 22 reported that WR Berkley was looking to sign off on the deal with Ho Bee Land for roughly £820 million, citing people 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 the UK amid the pandemic.

Shares of Ho Bee Land ended flat at S$2.80 on Feb 22 before it called for a halt on Wednesday morning. The counter will resume trading today.

READ MORE: 

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• Ho Bee Land acquires residential site in Melbourne for A$142m
• Brokers' take: DBS initiates Ho Bee with 'buy', S$3.80 TP on stable income, strong portfolio
• JustCo signs agreement with Ho Bee Land to manage space at The Metropolis