In an announcement yesterday, AmProp said its wholly-owned subsidiary Old Burlington Ltd (OBL) had entered into a joint venture with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd to purchase the property at 29-30 Old Burlington Street, London W1 for a consideration of £85 million.
“A further £5 million will be payable on receipt of the satisfactory planning permission to convert it to residential use,” read the statement. OBL is to have a 25% stake in the joint venture (JV) entity, Ten Acre (Mayfair) Ltd, while NL Pollen and HPL Mayfair hold 10% and 65% respectively. Ten Acre intends to assess the property’s potential for residential redevelopment.
Currently, the mid-terraced office building that was constructed in the 1930s comprises 83,024 sq ft of commercial accommodation over 10 floors, including the ground and basement levels. Restaurant and gallery tenants fill the ground and basement levels, while the upper floors provide office accommodation.
According to AmProp, the acquisition will be funded based on the three companies’ stakes in the JV. AmProp through OBL will commit £16.25 million, while NL Pollen and HPL Mayfair will contribute £6.5 million and £42.25 million respectively.
It is assumed that Ten Acre will be able to secure £35 million in bank loans. Should this financing not materialise, the shortfall will be made up by the three companies based on their stakes.
“Accordingly, the maximum funding commitment to be made by OBL is £23.75 million,” AmProp said.
The property is situated at the centre of east Mayfair and is well connected by the underground stations of Bond Street and Oxford Circus, as well as the bus routes in the vicinity. The JV to acquire the Old Burlington property is an extension of AmProp’s strategy to expand its portfolio into central London in recent years.
AmProp shares closed 1% higher at 50.5 sen yesterday, giving the company a market capitalisation of RM290.6 million.