[SINGAPORE] In what appears to be a surge of interest among Singapore developers for overseas ventures, UOL Group is making its debut in the UK with a £97 million (S$201.6 million) acquisition of prime freehold land in the heart of London.
UOL Group said yesterday that it has agreed to acquire a 3,200 square metre site in Bishopsgate, in the City of London, from Heron International, a European property investment and development company controlled by property tycoon Gerald Ronson.
The group hopes to operate a hotel on the mixed- use site under its hotel flagship brand "Pan Pacific", which will also mark Pan Pacific's foray into the UK.
Heron International was earlier said to be seeking a joint venture partner but put the site up for sale following a corporate restructuring and after receiving several offers for the project. Its earlier plans for a Four Seasons hotel and residential complex on the site did not materialise.
"We acquired the site through an expression of interest process conducted by CBRE/Savills UK," a UOL spokesman said. "This site presents a strategic opportunity for our long-term hotel investment as well as brand expansion for Pan Pacific."
The vacant site is located in London's central financial district, near the Liverpool Street Station. It is also near the future Crossrail station, part of the East-West railway linking the whole of Greater London.
UOL said it intends to review the configuration of the approved planning scheme, which allows for a 43-storey tower with 52,255 sq m of gross floor area comprising 109 residential units, a 190-room hotel and a retail component.
Its wholly owned subsidiary, Pan Pacific Holdings Group, owns and manages over 30 hotels in Asia, Oceania and North America under the "Pan Pacific" and "Parkroyal" brands.
Other Singapore developers have also made waves in London, snapping up historic or iconic sites in some cases.
Ho Bee Land, for instance, made a second office purchase in London in March, paying £171 million for a prime Grade-A office property at 1 St Martin's Le Grand, which served as the General Post Office of London in the late 19th century. It snapped up Rose Court, which overlooks the River Thames and houses the famous Rose Theatre owned by a heritage group, for £67.2 million last year.
KOP - which runs a boutique hotel in London's Kensington - in 2010 tied up with Thailand's Reignwood Group to restore a historic building, 10 Trinity Square, in London's CBD into a mixed development comprising a hotel, luxury residences and an exclusive members' club.
Oxley Holdings also launched its first project in London this year in a tie-up with London developer Ballymore in Royal Wharf, a mixed development in East London.
Other Singapore players have ventured into the United States and Australia too. They include Keppel Land's maiden US$70 million investment in a Manhattan residential project this month, as well as Pontiac Land's US$200 million investment to revive a residential tower adjacent to the Museum of Modern Art in midtown Manhattan last October.
In Australia, Far East Organization spent A$753.4 million (S$874.1 million) in the past year across eight projects, including Clocktower Square complex, a mixed development in Sydney's Central Business District that it bought for A$72 million.
"This is part of an emerging trend where Asian investors and owners are looking to acquire assets across the world in order to be in key gateway cities and markets to diversify the portfolio as much as possible," said Akshay Kulkarni, regional director for hospitality at Cushman & Wakefield.
Mr Kulkarni said he expects compressed values and potential upside in market performance to drive yields higher in the Western markets in the medium term.