Hongkong Land’s Singapore private fund buys Wheelock Place for S$1.1 billion
The deal will lift the fund’s assets under management to S$9.4 billion
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[SINGAPORE] Hongkong Land’s Singapore Central Private Real Estate Fund (SCPREF) is buying Wheelock Place from Wharf Real Estate Investment Company for S$1.1 billion, in the fund’s first acquisition since its inception earlier this year.
The deal, expected to complete by the end of August, will lift the fund’s assets under management (AUM) to S$9.4 billion from S$8.2 billion – a step towards its target AUM of S$15 billion.
Hongkong Land said on Thursday (Jul 30) that the acquisition “aligns with the group’s strategy of growing recurring earnings and expanding its fund management platform”.
It added that SCPREF, which it manages, and in which it is the largest unit holder, invests in high-quality commercial assets in Singapore with the aim of enhancing value through active management.
Michael Smith, group CEO of Hongkong Land, said: “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.”
He added that the deal marks the company’s entry into the “strategic” Orchard Road precinct.
Spanning about 43,280 square metres in gross floor area, Wheelock Place is a mixed-use development that comprises a 21-storey commercial building and two basement levels of offices, a shopping podium and a car park. It sits on a 99-year leasehold site, with about 63 years remaining on the lease.
The acquisition is expected to be accretive to the group’s underlying earnings upon completion.
Hongkong Land on Tuesday posted an underlying profit of US$259 million for the six months ended Jun 30, up 11 per cent from US$233 million in the corresponding year-ago period.
The increase was due to lower net financing charges from active capital recycling.
Its Singapore office portfolio “continued to perform strongly”, with positive rental reversions and average rents rising to S$11.90 per square foot (psf), compared to S$11.40 psf in the year-ago period.
The sale of Wheelock Place comes as Hong Kong’s Wharf Group is seeking to sell another Singapore asset.
The Business Times earlier reported that the company had put its Scotts Square mall back on the market for S$380 million, about 15 per cent below the S$450 million guide price sought in 2024.
Some 10 parties were said to be interested, including fund-type investors.
Investing more equity into the fund
Hongkong Land said it will invest additional equity to maintain its existing majority stake in the fund alongside other investors, and will earn extra management fees from the increase in the AUM.
SCPREF – Singapore’s largest commercial real estate private fund – was launched in February. Hongkong Land is the general partner and manager of the fund, and holds a majority stake at inception as a founding investor, along with Qatar Investment Authority and APG Asset Management.
Hongkong Land previously injected its one-third interests in Marina Bay Financial Centre (MBFC) Towers 1 and 2, Marina Bay Link Mall as well as One Raffles Quay into the fund.
Shares of Hongkong Land ended Thursday 0.6 per cent or US$0.05 higher at US$8.34, before the news.
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