Suntec REIT acquires 50% stake in Nova Estate (GB)

Suntec REIT acquires 50% stake in Nova Estate (GB)

Suntec REIT has acquired a 50% interest in two Grade A office buildings with ancillary retail (Nova North, Nova South and The Nova Building1 or collectively known as the Nova Properties) in the heart of Victoria, West End, London for an agreed value of €472.6m (£430.6m). The remaining 50% stake in Nova Properties will continue to be held by Landsec.


Chong Kee Hiong, Chief Executive Officer of the Manager, said: “The Nova Properties are a strategic fit with Suntec REIT’s existing portfolio of high-quality commercial assets in Singapore and Australia. These two premium Grade A office buildings will enhance the resilience, diversification and quality of Suntec REIT’s portfolio with income contribution from high-quality office tenants and long weighted average lease expiry of 11.1 years. The net property income yield of 4.6%3 will provide a DPU accretion of 4.9%4 upon completion of the acquisition in December 2020. There is also a 2-year guarantee on the retail income which will provide rental protection to ride out the current pandemic.”


The Nova Properties are situated in the heart of London. Besides being near to key landmarks such as the Buckingham Palace, Westminster Abbey and the Houses of Parliament, the buildings are also situated opposite the Victoria Station, an important interchange for the London Underground network and Victoria Coach station. Victoria Station is also United Kingdom’s second busiest railway station with direct train linkage to Gatwick Airport. Completed in 2016 and 2017, the Nova Properties is the newest large scale addition to the West End.


Constructed to the highest standards, it has a total net lettable area of approximately 559,000ft² and a long leasehold tenure of 1,042 years. The Nova Properties are 100% occupied by quality office tenants from diversified sectors with a weighted average lease expiry of 10.6 years. The strong income stream from the office tenants constitutes approximately 90% of Nova Properties’ total rental income. Key office tenants include Atkins, The Argyll Club, a government ministry, Vitol and BlueCrest.


Commenting on the partnership with Landsec, Mr. Chong said: “We are delighted to partner Landsec, which has a strong track record in managing assets in the United Kingdom. With their local knowledge and best-in-class practices, we are confident that the Nova Properties will continue to be a landmark, sought after development in London.”


Marcus Geddes, Head of Property at Landsec, commented: “We’re very pleased to welcome Suntec REIT as a partner for their first investment into the United Kingdom. We are also delighted that Suntec REIT has chosen to invest in Nova, highlighting how Landsec continues to deliver best-in-class office and retail space to the customers of the scheme.”

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