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City Developments Limited (CDL) has completed its acquisition of Aldgate House, a prime freehold Grade A commercial building in London, for £183 million (S$328 million).
The project is located within the heart of Aldgate district, right beside the Aldgate Underground station, while six other underground stations are within a five-minute walk.
With a net lettable area (NLA) of about 211,000 sq ft, Aldgate House currently enjoys an occupancy rate of 88 percent and is achieving a passing yield of about five percent, said CDL.
It noted that the building’s overall weighted average unexpired lease term of “6.2 years (to lease breaks) and 7.9 years (to lease expiries) is attractive as this will provide stable recurring income to CDL”.
“We see tremendous potential in this prime commercial building and we continue to believe that London will remain as a global financial hub,” said CDL group chief investment officer Frank Khoo.
“The vibrant Aldgate district is home to major occupiers from a diverse sector base including financial, fintech, insurance, legal, cultural and creative companies. It is also emerging as the heart of Digital London and the presence of healthtech companies is expected to increase with plans to develop a world-class life sciences research facility in the vicinity.”
He also noted the potential to undertake asset enhancement initiatives to add value to the building.
“We can refurbish office spaces to increase the rental and convert unused areas to provide additional facilities, such as a restaurant. Planning consent has also been obtained for the creation of additional massing at the basement for a commercial gym. CDL will continue to seek opportunities in the UK to further enhance our recurring income streams.”
To date, CDL owns another recurring income asset in the UK – the Development House office building. Measuring 28,000 sq ft, this prime freehold property at Leonard Street in Shoreditch district was acquired by CDL in 2016. It remains fully leased with vacant possession expected from Q3 2018.
CDL revealed that it has obtained planning approval to redevelop the site into a nine-storey building with more than 72,000 sq ft of NLA.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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