Tabung Haji buys Unilever House in Britain for £75.8mil (Update)
PETALING JAYA: Pilgrims fund Lembaga Tabung Haji has completed the purchase of Unilever House, Leatherhead in Surrey, London for £75.8mil, reflecting a net initial yield of about 6%, according to a London-based property consultancy.
Brokered by Islamic investment bank Gatehouse, this is Tabung Haji’s third property purchase in Britain, but its first outside central London.
Tabung Haji’s other purchases were 151 Buckingham Palace Road which it purchased for £205mil, reflecting a yield of 7% and 10 Queen Street for £165mil, giving the fund a yield of 5%. Both are office buildings.
The 176,100 sq ft property houses Unilever UK and Ireland’s headquarters. Other tenants include Kellog Brown & Root and CGI Logica. The property is fully tenanted. It was built for Unilever in 2008 and was acquired by LondonMetric in June 2012 for £61.15mil. The lease expires in 2023.
The Unilever House is close to the M22 highway and about 20 minutes travelling time from central London on the underground trains.
It is a modern freehold building comprising at least three floors and was refursbished to include an extension for car parks.
In a related development, Battersea Power Station Development Co Ltd (BPSDC) has purchased a 1.03 acres in the same area as its 39.5-acre Battersea Power Station project in Britain for £17.6mil.
This new purchase, 55 Sleaford Street, is located within the Nine Elms Parkside district of Nine Elms and is currently used as a milk distribution depot.
According to the Wandsworth Borough Council’s Consultation Portal, the site lies an area that it considers “an opportunity area”, a euphemism regeneration. This particular piece of land being purchased by BPSDC will be used for mixed use development including residential.
BPSDC is the company that is managing the Battersea Power Station project. Both S P Setia Bhd and Sime Darby Bhd have an equal stake of 40% each in the project, with the Employee Provident Fund holding the remaining 20%. S P Setia confirmed the sale.
Dairy Crest chief executive Mark Allen was reported to be delighted with the sale
“This reflects the work we have done to maximise the potential of this site over recent year,” he was reported to have said in a statement issued in London.
Dairy Crest had forecast property profits of around £8mil but it had also highlighted that Nine Elms (site) was a particularly valuable property which would result in a spike in profits in the year in which it was sold.
“We anticipate profits from the sale of depot that we no longer require, are likely to return to a more normal £5mil to £10mil in future years,” according to Allen.
It anticipates that profits from the sale of the depot will total around £18mil this year, £10mil ahead of previous expectations.
Dairy Crest said that residential milk deliveries have steadily declined over recent years as supermarkets have grown their share of the market and property profits from the sale of depots such as Nine Elms offset the costs associated with this decline.
On the impact of the appreciating sterling pound against the ringgit, a London-based property consultant said they the rising currency was not impacting the interest of Malaysians or any other nationality’s interest in UK properties.
“At the moment, the tone seems to be that a favourable currency spread is seen as a benefit when it happens, but not a disbenefit once the decision has been made to invest in the UK,” the source said.