Singapore’s Hoi Hup Sells London Office Building at Marked Down $100M

Singapore-based Hoi Hup Realty has sold the first overseas asset it ever bought, an office building near the northern tip of the City of London, for £75 million ($100.1 million), unloading the property at a £2 million markdown.

Hoi Hup bought the Victorian-era building, known as 1 Golden Lane, in 2015 for £77 million. The property’s 106,892 square feet (9,931 square metres) of office space was single-let to UBS at the time, but the Swiss banking giant delivered a blow when it declined to renew its lease this year and vacated the premises as part of a downsizing in the British capital.

The buyer of 1 Golden Lane, Castleforge Partners, will renovate the structure for a lower carbon impact with improved air flow, energy efficiency and automated systems, the property investment firm said in release. Local consultancy Allsop advised Castleforge on the deal, while Savills and Knight Frank assisted Hoi Hup, which is led by chairman Wong Swee Chun.

“By undergoing a state-of-the-art refurbishment process, 1 Golden Lane will become one of the most premium and green office spaces in London and we look forward to unveiling the refreshed building for occupiers and local stakeholders alike,” said Michael Kovacs, founding partner of Castleforge.

Golden Dreams

Situated in the Farringdon area near the Barbican Centre for the performing arts, 1 Golden Lane started life in 1896 as the home of the Cripplegate Institute, a charitable foundation set up by the City of London, and once incorporated a reference library and a theatre.

“We have identified a significant shortage of best-in-class office buildings for leading companies in London that meet required sustainability standards,” Kovacs said. “The market has not yet realised the true cost of upgrading old stock to meet modern standards and this issue can only be addressed by investors who are well-capitalised with the capability to deliver this grade of space.”

Hoi Hup acquired the building in mid-2015, drawn to the prospect of a stable income with a strong investment-grade covenant. The Singaporean developer later added to its local portfolio with the 2018 purchase of two Midtown properties, the 44 Southampton Buildings office complex and the 322 High Holborn mixed-use building.

44 Southampton Buildings features 17,444 square feet of office space, single-let to flexible workspace provider Beaumont Business Centres, while 322 High Holborn comprises 70,288 square feet of office, retail, residential and ancillary accommodation.

Bold Strokes Back Home

Despite cutting its losses in England, Hoi Hup has stayed active on the home front with the acquisition of two significant residential development sites in Singapore.

The subsidiary of Straits Construction made a splash in late November when it partnered with Sunway Developments to buy a pair of adjoining freehold land parcels on Thiam Siew Avenue near the Paya Lebar Central commercial hub for S$815 million ($600.2 million), marking the city-state’s biggest land deal of the year.

The joint venture plans to develop two luxury condo towers yielding more than 800 units at the District 15 site.

The Thiam Siew deal came on the heels of Hoi Hup and Sunway’s September purchase of the Flynn Park apartment complex in the Pasir Panjang area for S$371 million ($276.1 million), setting a mark for Singapore’s biggest collective sale of the year.

The ageing property near the Greater Southern Waterfront project can be redeveloped into a low-density project of up to 271 units with an average size of 100 square metres (1,076 square feet).