Singapore Fund Manager Buys London Asset From Hong Kong’s Lai Wing-to for $46M

A recently established Singapore fund manager has made its maiden acquisition, picking up a commercial building in London’s Soho area from Hong Kong investor Lai Wing-To for around £35 million ($45.7 million), according to a statement on 21 August.

HECapital, helmed by Darren Hawkins, is acquiring 147-155 Wardour Street, which forms part of a trio of West End properties known as the Trinity portfolio, as the less-than year-old company looks to the UK capital for the launch of a strategy targeting opportunities in major economic hubs.

“This acquisition is the first of our active investment for London, where we see substantial ongoing opportunities,” Hawkins, who serves as the company’s CEO, said in a statement. He added that, “Our investment strategy targets London initially, where pricing has rebased quickly. Our investments will then expand to other cities gateway cities.”

Hawkins and his team are acquiring the 25,365 square foot (2,356 square metre) office and retail property in one of London’s poshest districts, for the equivalent of around £1,380 per square foot, with HECapital indicating a net initial yield of around 6 percent.

Bi-City Sales Effort

Fully occupied as of February of this year, 147-155 Wardour Street earns annual rent of £2.0 million, according to JLL, which marketed the six-storey property on behalf of Lai Wing-to, who is known as Hong Kong’s “Ten Billion Shop King” after having earned a fortune investing in Hong Kong’s retail real estate market over the past three decades.

Situated in the Soho area, 147-155 Wardour Street is within walking distance of Tottenham Court Road, Oxford Circus, Piccadilly Circus and Leicester Square Underground stations.

BNP Paribas Real Estate and DLA Piper represented HECapital in the acquisition. Aman Panesar, a director with the central London investment team at BNP Paribas Real Estate pointed to the deal as a sign of the enduring appeal of the high-end London neighbourhood.

“The appetite for well-located West End investment opportunities rolls on and this deal is another marker that the sentiment towards London offices has improved as buyer and seller expectations are matching up more frequently,” Panesar said. “We’re particularly seeing this across mixed-use units offering retail with established locations attracting resilient rents.”

Lai had purchased the freehold building from New York-based real estate private equity firm Thor Equities for £49 million in 2018, with the Hong Kong tycoon now struggling to sell down his property portfolio in what some analysts have termed a liquidity crunch.

Along with Standbrook House at 2-5 Old Bond Street and 291 Oxford Street & 2 Harewood Place, 147-155 Wardour Street formed Lai’s Trinity Portfolio with the veteran investor having also put a set of Hong Kong properties estimated to be worth HK$600 million ($77 million) on the market in the first quarter of this year.

Earlier this month JP Morgan was reported to have purchased 291 Oxford Street & 2 Harewood Place from Lai Wing-to for £71.4 million with Standbrook House on Old Bond Street still said to be on the market.

Lower Rates, Rising Interest

With the Bank of England on 1 August having cut interest rates for the first time since the onset of the pandemic in 2020, properties in the UK are seen regaining some of their traditional appeal to Asian investors following a widespread reset in values.

“With the recent reduction in interest rates in the UK and globally, investment in real estate will grow,” said Ciaran Londra, partner and head of real estate at DLA Piper in Singapore said. Specialising in cross border transactions, Londra added that, “This deal represents a further stamp of approval on the London market and I expect this to be the first of many such transactions over the next period.”

Having raised £100 million in equity from institutional investors, family offices and high net worth individuals in Asia to invest in London, HECapital has total funds available of around £200 million, including both equity and leverage, the company said.

“HEC was formed to provide a trusted means for Asian capital to access real estate opportunities in global gateways,” Hawkins said. He added that, “Our leadership team provides a 360 degree understanding of property, a wealth of knowledge and expertise that allows us to locate and extract value for our institutional and family office investors.”

The company looks to benefit from strong income profiles while taking a medium to long-term view to potential exits, the Singapore-based executive told Mingtiandi in written comments.

Hawkins also serves as a director of Singapore-based data centre developer and operator Space DC.