HK Developer Buys 2 London Office Bldgs

HK Developer Buys 2 London Office Bldgs For £180m

UNITED KINGDOMK&K Property Holdings has acquired 2 office buildings in London’s West End for a total of £180 million ($244 million), reported Mingtiandi on Tuesday (29 December), citing the Estates Gazette.

The commercial properties bought by the Hong Kong developer consist of Corinthian House at 279 Tottenham Court Road and Endeavour House on Shaftesbury Avenue.

In particular, K&K Property is paying £115 million to acquire Endeavour House from Aberdeen Standard Investments. As the freehold asset measures 7,900 sq m (85,040 sq ft), the company is paying roughly £1,352 psf. Built in 1982, the property generates rental income of £5.9 million per year from nine tenants, so the transaction’s net initial yield is about 4.8 percent.

“Location is the major drive for the acquisition, given it is in close proximity to the Tottenham Court Road Station, which will be one of the major stations for the London Crossrail Project which connects from the East to the West of London,” commented Gigi Wong, Head of international capital at JLL Hong Kong, which brokered the sale of the 2 properties on K&K Property’s behalf.

Wong noted that the buyer may enjoy higher returns as both properties can potentially be improved. The assets could also benefit as London’s West End has undergone major regeneration recently.

About 500 metres north west of Endeavour House lies Corinthian House, which was picked up by K&K Property for £65 million from Deloitte, the administrator for Arcadia, the property owner and the bankrupt parent firm of the fashion retailer having the same name.

K&K Property – a firm established by Raymond Law Ka-kui and his son Kino Law – is buying Corinthian House at an initial yield of 4.25 percent. The developer is forking out about £1,869 psf for the property, which was completed in 1909 and refurbished in 1997.

Bank and insurance firm HBOS plc has agreed to lease the retail portion of the 37,000 sq ft freehold building for another 12 years, while there is opportunity to upgrade the offices on the upper levels as the leases are poised to expire in September 2021.

Interestingly, Endeavour House and Corinthian House are both just a short walk from Orion House, a 90,916 sq ft office building that K&K Property acquired from BentallGreenOak in December 2019 for £130 million. That transaction marked its maiden property investment in London.

Meanwhile, Bossini heir Raymond Law’s sibling, Law Kar Po, also controls Singapore-based Park Hotel Group, which operates, owns and builds hospitality assets across Asia Pacific.

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