Ho Bee Land, on Feb 24, announced the acquisition of The Scalpel in London for a total consideration of £718 million ($1.3 billion) to be satisfied entirely in cash.
A deposit of £35.9 million has been paid on Feb 23. The balance will be paid upon the completion of the acquisition on March 7.
The acquisition was made via acquiring all the shares in 34 Leadenhall Street Limited from Berkley Insurance Company and Berkley Regional Insurance Company.
34 Leadenhall Street Limited is a private limited company, which is the registered owner of The Scalpel.
Upon the completion of the acquisition, the company will become a wholly-owned subsidiary of Ho Bee Land. Ho Bee Land’s executive chairman and controlling shareholder Chua Thian Poh, along with its executive directors, Mr Nicholas Chua and Ong Chong Hua will be appointed as directors of 34 Leadenhall Street Limited.
The Scalpel is a prestigious Grade A office tower that’s sited on a freehold site of around 0.31 hectares. The property has around 406,000 sq ft of Grade A office space spread across 36 storeys. It also has three retail units at its ground and basement levels.
The building is located at 52 Lime Street, which is at the junction of Lime Street and Leadenhall Street, adjacent to The Lloyd’s of London. The Lloyd’s is deemed to be the heart of the city’s insurance district.
According to Ho Bee Land, The Scalpel, which was designed by renowned American architect firm Kohn Pederson Fox Associates, was designed with sustainability in mind.
Completed in early 2019, the building has achieved a classification of BREEAM (which stands for the Building Research Establishment Environmental Assessment Method) “Excellent” and an Energy Performance Certificate rating of B.
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Built for insurance company W.R. Berkley, The Scalpel is the firm’s new European headquarters. It is also predominantly let to other reputable tenants from the insurance, financial, legal and technology sectors such as the National Australia Bank, Britannia Financial Group and Morrison & Foster. The leases have long tenancies, which offer a 10-year passing rent of £29 million, which translates to a yield of 4%.
The acquisition will be financed by internal funds and bank borrowings and is expected to contribute positively to Ho Bee Land’s earnings per share (EPS) and net tangible assets (NTA) per share for the financial year ending Dec 31.
According to Ho Bee Land, the acquisition is in line with its strategy to diversify overseas and grow its recurrent income base.
The property will be held for long-term investment.
Nicholas Chua, CEO of Ho Bee Land says, “London has proved to be very resilient in spite of Brexit and the pandemic. It has been able to maintain its position as a key global financial hub with a robust office investment market. We are very excited to be able to seize this rare opportunity to acquire a landmark office tower which ticks all the boxes for quality, distinction and sustainability. We remain confident of London’s long-term economic prospects and attractiveness to global investors.”
“With this acquisition, our total investment in London would increase to more than £2 billion. The Scalpel’s 10-year secure long-term income would further strengthen the group’s recurrent income base,” he adds.
Shares in Ho Bee Land last traded at $2.80 before its trading halt on the morning of Feb 23.
Photo: Ho Bee Land
