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Ho Bee Land to invest up to 90m euros in Credit Suisse's European property fund

PROPERTY developer Ho Bee Land (HBL) on Monday said it has agreed to invest up to 40 million euros (S$64.8 million) in Credit Suisse (Lux) European Property Fund II.

It has also committed to co-invest up to an additional 50 million euros by acquiring notes issued by a securitisation company called Clouse SA, Compartment 29.

The fund invests in real estate and investment structures in key cities in Europe. As for Clouse SA, it is a public limited liability company set up in Luxembourg. The notes are issued through private placement, and the proceeds will be invested in a commercial building complex of about 45,000 sqm next to the main railway station in Munich, Germany.

The mixed-use property comprises the square between Bayerstrasse 49-53, Paul-Heyse-Strasse 7 and Schwanthalerstrasse 46-50 in a prominent location directly on Central Station in Munich.

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In a filing to the Singapore Exchange, HBL said: "The investments are in line with HBL group's strategy of geographical diversification and its investment strategy to optimise returns on its available funds."

HBL already has several residential and commercial projects in the United Kingdom, mostly in London. Last June, HBL acquired a central London office building at 67 Lombard Street for £129.3 million (S$241 million).

In its latest announcement, HBL's total consideration of 90 million euros for the investments will be satisfied fully in cash, as and when required by the fund and the notes, it said.

It added: "The investments constitute new capital in both the fund and the notes and do not entitle HBL to economically participate in any historical returns prior to the date of the investments."

The total consideration of S$145.8 million makes up about 8.6 per cent of the developer's market capitalisation.

HBL said the investment will be financed using its internal funds and bank borrowings. It is not expected to have any material impact on the consolidated earnings per share and net tangible assets per share of the group for the financial year ending Dec 31, 2018.

HBL shares fell one cent to close at S$2.51 on Monday.