Singapore’s Suntec REIT To Buy London Office Building For $489 Million

Suntec REIT— which counts tycoon Gordon Tang among its biggest shareholders—has agreed to buy an office building in London for 353 million pounds ($489 million) as the Singapore-based office landlord moves to diversify its assets.

The acquisition of the Minster Building in London will be Suntec’s second investment in the U.K. where it holds a 50% stake in Nova Properties, owner of two grade A office buildings in London’s West End near Buckingham Palace.

The 11-story tower was built in 1990 and refurbished in 2018. The grade A office building with an ancillary retail space has a gross floor area of 230,000 square feet (21,367 square meters) and generates an income yield of 4.5%

“The grade A office development is a strategic fit with Suntec REIT’s existing portfolio and will enhance the resilience, diversification and income stability of Suntec REIT’s portfolio,” Chong Kee Hiong, CEO of Suntec’s manager ARA Asset Management, said in a statement.

Suntec’s latest investment in London comes as the company recently stepped up asset sales in Singapore. In announcing the Minster’s acquisition on Tuesday, the REIT said it is also selling some strata units at its flagship Suntec City office and retail complex near Marina Bay for S$197 million ($146.5 million).

Earlier this month, Suntec sold its 30% stake in UBS’s Singapore headquarters for S$295.5 million to SingHaiyi Group, a listed real estate company controlled by Tang and his wife Celine.

Proceeds from the divestments and the recent issuance of S$150 million of perpetual securities helped improved Suntec’s financial flexibility and support the group’s strategy of pursuing growth opportunities, Chong said. “The Minster Building is higher yielding than the divested assets,” he added.

The acquisition of Suntec’s stake in the UBS building gave the Tangs full control of the asset, which Suntec jointly developed with SingHaiyi and Haiyi, a private company controlled by the couple.

In May, SingHaiyi, which is chaired by George W Bush’s brother Neil, led a consortium that submitted the highest bid for the en bloc purchase of the Maxwell House building in the Tanjong Pagar area near the Raffles Place business district for S$276.8 million.

The Tangs were ranked No. 38 when the Singapore Rich List was last published in August 2020. With a net worth of $940 million, the couple’s largest asset is Suntec, which owns prime properties in the city’s financial district.