Hongkong Land has bought a landmark mixed-use property in Singapore for its Singapore Central Private Real Estate Fund (SCPRE) from listed Hong Kong property group, Wharf Real Estate Investment Group, for S$1.1bn (€740m).
Wheelock Place, located in Orchard Road, Singapore’s main tourist thoroughfare, comprises a 21-storey commercial building and two basement levels incorporating offices, shopping podium and car parks.
The company said the asset’s prime location, established office and retail offering, and long-term growth potential made it a highly strategic addition to SCPREF’s portfolio. The acquisition also supports the fund’s investment mandate of acquiring high-quality, income-generating commercial assets in Singapore’s Central Business District and the Orchard Road precinct.
Michael T Smith, group chief executive of Hongkong Land, said: “SCPREF was created to acquire assets of a calibre that rarely come to market, and Wheelock Place is precisely that. To have secured this premium asset within months of the fund’s launch reflects both the effectiveness of our fund management team and the confidence of our capital partners.
“It is a strong start, and one we fully intend to build on as we deliver on earnings accretion for investors and grow the fund towards its target scale. This acquisition also marks Hongkong Land’s successful entry, via SCPREF, into the strategic Orchard Road precinct, further enhancing our Singapore commercial footprint.”
Smith said Hongkong Land would invest additional equity to maintain its existing majority equity stake in the fund alongside other investors and will earn additional management fees from the increase in assets under management (AUM).
The fund was launched in February this year with Qatar Investment Authority and APG Asset Management as its foundation investors.
Upon planned completion by the end of next month, SCPREF’s AUM will increase to S$9.4bn from S$8.2bn at inception – a significant step towards its target AUM of around S$15bn.
The company said the acquisition aligned with Hongkong Land’s strategy of growing recurring earnings and expanding its fund management platform. SCPREF, with Hongkong Land as the manager and single largest unitholder, was established to pursue growth opportunities in Singapore’s commercial real estate market through high-quality acquisitions and to drive value through active asset management, operational enhancements and long-term value creation.
To read the latest IPE Real Assets magazine click here.