HSBC backs Hong Kong firm’s London purchase

HSBC has provided a £100 million loan to finance a Hong Kong-based investor’s purchase the 20 Moorgate office building in the City of London.

The bank provided the circa 64 percent loan-to-value facility to Asian Growth Properties (AGP) for five years.

AGP is an AIM-listed investor and developer of commercial office, retail and residential properties in Hong Kong and mainland China as well as a hotel owner and operator. AGP listed on the AIM in January 2006.

The company closed the acquisition of the 155,000 square foot 20 Moorgate on 7 November through the purchase of the entire units in the trust which owned the property from Deutsche Fonds Holding. The units were purchased for around £154 million (HK$1,491 million), reflecting a 4.4 percent net initial yield.

The property is fully let to two tenants under long-term agreements. The office element of the building is occupied by the Prudential Regulatory Authority, a regulatory body of the Bank of England, until June 2027. The sole retail unit is let to Fuller, Smith & Turner until December 2039.

The property was most recently valued in October 2016 at £157 million. Net pre-tax profit of the trust for 2015 was £6 million. AGP forecasts that the building will generate rental income of £7.5 million per year.

AGP said that since its admission to the AIM, it has been focused on developing its property portfolio in Hong Kong and mainland China, although it has no geographical restriction to its investment activity.

“Following the disposal of several projects earlier this year, the company has been identifying potential acquisition targets in both local and major international markets. The acquisition is an excellent opportunity for the company to acquire a high quality commercial property at a prime location in the City of London with a stable rental income,” AGP said.