SGX-listed Sinar Mas Land has rejoined the wave of Asian investment into the UK capital with a deal to buy a central London commercial building for £195 million ($238 million).
The developer controlled by Indonesia’s Widjaja family, which is famed for its Asia Pulp and Paper business, is acquiring 32-50 Strand in the Charing Cross area, about four minutes’ walk from Trafalgar Square, the company said Thursday in a filing with the Singapore Exchange.
The freehold building on the historic Strand comprises 139,000 square feet (12,914 square metres) across basement, ground and eight upper floors. The seller is London-based property giant Land Securities Group, known as Landsec, which revealed the sale in ia parallel announcement to the London Stock Exchange.
The announcement comes after Sinar Mas sold its office block at 10 Great Pulteney Street in Soho last year. The company continues to hold its Alphabeta Building near the City of London.
Fix and Sell
The acquisition of 32-50 Strand will further strengthen recurring income with the addition of a prime asset with strong cash flows, said Sinar Mas, which expects to complete the transaction by the end of June via internal resources and bank borrowings.
The firm chaired by Muktar Widjaja will pay roughly £1,403 ($1,711) per square foot for the 1957-vintage building, which was renovated a decade ago and with property listings promoting two available fifth-floor office suites in the building at leasing rates of £62.50 ($76.15) per square foot.
The property’s ground-floor retail offerings include a Superdrug pharmacy, a Sainsbury’s Local convenience store, and Lloyds and NatWest bank branches, as well as McDonald’s and Itsu restaurants.
“The sale of Strand crystallises value that we’ve created since its comprehensive refurbishment in 2012 and more recently through active asset management to extend the length of the office and retail income,” Marcus Geddes, Landsec’s managing director for central London, said in the company’s statement to the exchange. “The sale recycles capital to fund long-term growth and new acquisitions to drive returns for shareholders.”
Trading in London
In April of last year, Sinar Mas revealed that it was selling its entire interest in 10 Great Pulteney Street, a building known as Unlimited House, for £72 million ($99.3 million) in cash to UK online fashion retailer Boohoo.
Built in 1997, the seven-storey Unlimited House (formerly known as Warwick House) comprises 44,116 square feet of Grade A office space and a self-contained five-unit residential block of 2,928 square feet.
Sinar Mas previously acquired the Alphabeta office building at Finsbury Square for £259 million in 2015. The Indonesian giant also holds overseas properties in Malaysia, Australia and mainland China, where its portfolio of projects includes Shanghai Sinar Mas Plaza and the Shanghai Arch, the Shanghai Bund Center and the Ningbo Sinar Mas Plaza in Zhejiang province.