City Developments Limited (CDL), a developer controlled by Singaporean billionaire Kwek Leng Beng, has acquired Aldgate House in the City of London for £183 mln (€205 mln) from Hermes Investment Management and Canada Pension Plan Investment Board (CPPIB).
The eight-floor commercial building comprises around 211,000 ft2 (19,600 m2) of office accommodation and is 88% occupied.
'A key focus for CDL is to grow our recurring income significantly over the next 10 years through acquisitions and organic growth which will help to mitigate the volatility of development projects,' commented Frank Khoo, CDL group chief investment officer.
'We see tremendous potential in this prime commercial building and we continue to believe that London will remain as a global financial hub.'
Located adjacent to Aldgate Underground Station, Aldgate House was originally constructed in the 1970s and has been siginificantly refurbished since 2013, when Hermes and CPPIB took ownership of the asset.
'The disposal of Aldgate House marks the culmination of a proactive asset management strategy that was put into place,' said Chris Taylor, head of private markets at Hermes Investment Management.
'This has included significant refurbishment works and the regearing of leaseholds within the building. Capital from this sale will be put towards the selective acquisition of assets, both within the City of London and further afield, that present an opportunity for added value to be achieved.'
'There is also potential to undertake AEI (asset enhancement initiative) to add value to this property,' added Khoo.
'We can refurbish office spaces to increase the rental and convert unused areas to provide additional facilities such as a restaurant. Planning consent has also been obtained for the creation of additional massing at the basement for a commercial gym. CDL will continue to seek opportunities in the UK to further enhance our recurring income streams.'
JLL and Corbett Northam acted on behalf of Hermes Investment Management and CPPIB.
