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Stamford Land, chairman buy London office, retail building for £260m

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8 Finsbury Circus in London comprises 10 floors of Grade A commercial office units with ancillary retail units. It is fully let to one retail tenant and four office tenants.

MAINBOARD-LISTED luxury hotel operator Stamford Land Corporation has bought a 60 per cent stake in a freehold Grade A office and retail property in London, while Ow Global has acquired the remaining 40 per cent, for a total consideration of £260 million (S$441.2 million).

Ow Global is owned by the executive chairman of Stamford Land, CK Ow.

The building, 8 Finsbury Circus, has a net lettable area of about 180,000 square feet, comprising 10 floors of Grade A commercial office units with ancillary retail units. The previous owner, Mitsubishi Estate London, completed the redevelopment in 2016.

The property is fully let to one retail tenant and four office tenants, which include investment houses, and provides a weighted average unexpired lease term (WAULT) of close to 14 years.

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The acquisitions were completed on Friday, through subsidiaries of Stamford Land and Ow Global. Stamford Land paid about £156 million or 60 per cent of the purchase price in cash. Ow Global paid the balance £104 million.

The purchase price of £260 million was arrived at based on the seller’s acceptance of the bid placed by Stamford Land, for and on behalf of itself and Ow Global.

This bid took into account the location, condition, tenure, potential yield, potential redevelopment of the property, prevailing market conditions and current market prices of properties in the surrounding vicinity of the property.

Stamford Land said the acquisition is in line with its strategy to actively seek new investments in developed countries to augment its earnings.

The purchase is not expected to have any material impact on the financial performance of the group for the current financial year ending March 31, 2020.

Savills advised the seller, Mitsubishi Estate London, for the purchase. Stephen Down, head of central London investment at Savills, said: “It is the first new commercial office development on Finsbury Circus for over 25 years, and occupies a unique position overlooking the only garden square in the City of London.”

“There was substantial international interest in this trophy asset. Ultimately, Stamford Land was selected for its short timeline to completion,” Mr Down added.

Stamford Land owns and manages its chain of five-star hotels in Australia and New Zealand. The company also owns commercial properties and recently completed a 712-unit residential development in Sydney.

Its shares were trading flat at 48.5 Singapore cents as at 11.03am on Monday.