First Sponsor expands in Europe with S$89m buy

MAINBOARD-listed First Sponsor Group is expanding its presence in Europe with its second acquisition in Amsterdam's central business district, two weeks after it made a move to buy a hotel in Germany.

The investment holding company that develops and sells residential and commercial properties in China and the Netherlands has proposed to acquire a second office building in Amsterdam's central business district for 55.5 million euros (S$88.4 million), which includes transaction costs, through its wholly-owned subsidiary.

The proposed deal, entered to on Dec 22, is for the majority apartment rights of Meerparc, a mixed-use office property in the Netherlands.

"Meerparc is a five-storey strata-titled freehold property located in the South Axis, the main central business district of Amsterdam. The multi-tenanted property with a substantial office component is situated right next to the Zuiderhof I building, the group's first office property investment in the Netherlands acquired in early 2015 (as member of a consortium)," said First Sponsor in a filing with the bourse operator on Tuesday morning.

It added that similar to Zuiderhof I, which is fully let out to a reputable law firm, the anchor tenant of Meerparc is DLA Piper Nederland BV which has a relatively long remaining lease.

The property's site area stands at 9,744 square metres. It has about 12,200 square metres of office area, 4,618 square metres of retail or commercial area and 218 car park lots. The remaining 772 square metres of retail or commercial area and 15 car park lots in Meerparc are owned by third parties.

First Sponsor, an associate of Millennium & Copthorne Hotels plc, said Meerparc's weighted average lease term is five years and that there is a 73 per cent occupancy.

Neo Teck Pheng, the group's CEO said that the expanded presence "will further enhance the recurrent income of the group". He added that Meerparc's prime location and freehold tenure means that the property has good redevelopment potential.

On Dec 7, First Sponsor together with key shareholders City Developments Limited (CDL) and Tai Tak Estates Sdn Bhd announced that they would be buying the Le Meridien Frankfurt Hotel in Germany for about 85 million euros (S$135.6 million).

This proposed purchase is carried out through a joint venture partnership and the deal is expected to be completed late this month or early next month.

The hotel, a freehold property, is near the main train station in the district of Bahnhofsviertel in the centre of the city of Frankfurt.

Shares of First Sponsor closed down one cent to S$1.38 on Tuesday.

Clarification note: The article has been updated to reflect in no uncertain terms in the first paragraph that First Sponsor's Amsterdam buy is the second one in the central business district, as elaborated in the next line.