United Engineers buys two HP buildings for $402m

20130918-st-united-engineers-buys-2-hp-bldgs-for-$402m-pic UNITED Engineers (UE) is buying Hewlett-Packard Singapore's two buildings in Alexandra Road for a total of $402 million.

The acquisition will be funded wholly in cash, and will bring the net book value of the group's properties under management to over $2 billion, it said yesterday.

Under the terms of the purchase, Hewlett-Packard will lease back the 345,101 sq ft industrial building for five years, with three options to renew for a further five years each.

The American computer giant will also lease back the commercial building, with a gross floor area of 155,932 sq ft, for three years. This includes two options to renew for six months each.

The properties are 450m from the Labrador Park MRT station.

UE's deal comes on the back of its $410 million acquisition of a freehold commercial building at 79 Anson Road in February.

"The group has been steadily building up a portfolio of well- located and tenanted commercial and industrial properties across Singapore to complement its property development activities," it said.

The rental income from Hewlett-Packard will give the firm a chance to evaluate plans to redevelop the properties when the leases expire, UE added.

In July, UE sold its mixed-use property in Changi for $518 million, in one of the biggest commercial real estate deals since 2010.

Chief executive Jackson Yap said then that the move would unlock capital for other acquisitions.

He said it was also eyeing upcoming land tenders for residential or commercial developments, noting that UE might set up a real estate investment trust if it has enough projects in the pipeline.

UE shares closed 0.5 cent up at $1.80 yesterday.

Source: Straits Times, 18 Sep 2013

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