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Hwa Hong buys stake in firm that is buying London property for £15m
PROPERTY company Hwa Hong Corporation on Friday said that it has acquired a 50-per-cent stake in investment holding firm Loman Holdings (LHL) for £50 (S$91). LHL owns property investment firm Capital Loman, which has signed an agreement with an unrelated third party, Good Harvest Group, to buy a freehold property at 46 Loman Street, London, for £14.85 million following an open market sales process.
The acquisition, expected to be completed by end-March 2018, will be funded by bank loans and internal cash sources. The property is a freehold commercial property in the Southbank area in the borough of Southwark, London, close to the Tate Modern London and landmarks such as Borough Market, the Globe Theatre, The Millennium Bridge and The Shard.
It's a short walk from Southwark London Underground station and also within walking distance of the recently refurbished Blackfriars Station and London Bridge Station. It has a floor area of about 19,786 square feet and comprises five floors of office accommodation. It is currently fully leased and produces an annual gross rental income of about £520,000, or £26.28 per square foot.
"The investment will allow the group to . . expand its commercial property portfolio in Southbank area in London. The investment is also in line with the group's strategy to seek value-add opportunities in the central London commercial property market for recurrent rental income and capital appreciation. The group intends to carry out an asset enhancement exercise to increase the lettable area as part of a longer term strategy to reposition and to re-let the building," it said.
Hwa Hong expects the acquisition to be accretive to its earnings per share at the current levels of rent. But the investment is not expected to have a material impact on the earnings per share and net tangible assets of the company for the financial year ending Dec 31, 2018.