Straits Trading buys freehold business park in the UK for £76.7m

THE Straits Trading Company is acquiring a freehold business park in the United Kingdom for a total cash consideration of £76.7 million (S$137.9 million), it announced in a Singapore Exchange filing after market close on Wednesday.

The acquisition, made via its subsidiary Straits Real Estate, is of Bourne Business Park in Addlestone, England.

The total consideration was arrived at after arm's-length negotiations, on a willing-buyer-willing-seller basis, taking into account current tenancies, comparable transactions in the market and future market prospects. It will be satisfied by internal funds and bank borrowings.

Of the consideration, 10.5 per cent has been paid as a deposit upon the signing of the agreement, while the rest will be paid on completion of the proposed acquisition.

Straits Real Estate chief executive officer Desmond Tang said: "We see value in the property as it gives us a resilient stream of income via its stable existing leases. There is also value-add potential through refurbishment or redevelopment of part of the business park."

The property comprises six standalone office buildings with an approximate total net lettable area of 182,364 square feet. It is currently 96 per cent let to multiple tenants from diversified industries including medical, legal, electronics and logistics, said Straits Trading.

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"The property is of strategic importance to many of its tenants as it serves as their UK, European or global headquarters," it added. "Most of the leases are long term with a WAULT (weighted average unexpired lease term) of 7.5 years, which positions the property well in dealing with near-term uncertainties from the Covid-19 pandemic."

Straits Trading shares closed unchanged at S$1.54 on Wednesday before the news.