Hong Kong’s Kingboard to Buy London Commercial Building From Brookfield for $360M

Kingboard Holdings has struck a deal to buy a central London commercial building for £293.6 million ($360 million), snapping a four-and-a-half-year pause in UK acquisitions for the Hong Kong-based laminates maker and property investor.

The 16-storey building, called 2 London Wall Place, provides 187,200 square feet (17,391 square metres) of Grade A office space and 1,500 square feet of retail space, Kingboard said Wednesday in a filing with the Hong Kong stock exchange. The office portion is 96 percent leased and the retail area is fully leased.

The seller of 2 London Wall Place is Canadian investment giant Brookfield, according to publicly available records. The 2018-vintage property in the City of London sits about a two-minute walk from Moorgate railway station and Moor Place, an 11-storey commercial building acquired by Kingboard from Brookfield in 2016.

“Taking into account the location, quality and occupancy rate of the property, the board considers that the acquisition is in line with the business strategies of the group and is in the interests of the company and its shareholders as a whole,” Kingboard said.

Back to the City

Led by founder and chairman Paul Cheung, Kingboard has sought to diversify from churning out laminates and circuit boards by becoming a real estate investor in China and Britain.

For its latest London purchase, the company will pay roughly £1,556 ($1,901) per square foot for 2 London Wall Place’s 188,700 square feet of leasable space. The property generates annual gross rental income of £12.9 million, indicating a 4.4 percent yield.

According to Brookfield, the London Wall Place development boasts 35,000 square feet of landscaped roof terraces, 114 cycle parking spaces, five subway stations within a five-minute walk and an Excellent rating under the BREEAM sustainability standard.

The development’s first phase, 1 London Wall Place, was completed in 2017 and sold by Brookfield to AGC Equity Partners for £480 million in 2020, Estates Gazette reported. The 310,000 square foot building serves as the headquarters for investment management giant Schroders. Brookfield had bought out fellow Canadian investor Oxford Properties’ 50 percent stake in the London Wall Place project in 2019, according to EG.

Kingboard last made a splash in London with the purchase of KPMG’s Canary Wharf headquarters for nearly £400 million ($533 million) in a sale-leaseback deal announced in December 2017. That transaction came just over a year after the Hong Kong group bought Moor Place, the European headquarters of WeWork, for £271 million ($331 million).

Kingboard’s other London investment properties include two adjoining commercial buildings, One Aldgate and 90 Fenchurch Street, in the City of London’s Aldgate area.

Swooping on Deals

With British asset values reportedly depressed post-Brexit, Asian investors have been scooping up commercial buildings in the UK capital.

In May, Sinar Mas Land agreed to buy 32-50 Strand in the Charing Cross area from London-based property giant Landsec for £195 million ($238 million), complementing the Singapore-listed firm’s Alphabeta Building near the City of London.

Singapore sovereign wealth fund GIC in April revealed plans to acquire ownership of a set of British Land’s commercial projects in the Paddington area for £694 million ($883 million), and February saw Singapore’s Ho Bee Land announce that it would buy the Scalpel office tower in the City of London for £718 million ($972 million) from US insurer W.R. Berkley.