Hongkong Land announced on Thursday (Jul 30) that SCPREF has signed a binding agreement to acquire Wheelock Place from Hong Kong-listed Wharf Real Estate Investment Company. The deal, expected to complete by the end of August, is consistent with a recent independent valuation of the property.

Michael Smith, group CEO of Hongkong Land, said: “It is a strong start, and one we fully intend to build on as we deliver on earnings accretion for investors and grow the fund towards its target scale.” He added that the deal marks the company’s entry into the “strategic” Orchard Road precinct.

The acquisition aligns with the group’s strategy of “growing recurring earnings and expanding its fund management platform”. SCPREF invests in high-quality commercial assets in Singapore with the aim of enhancing value through active management. Hongkong Land is the general partner and manager of the fund, and holds a majority stake at inception as a founding investor, along with Qatar Investment Authority and APG Asset Management.

Wheelock Place is a mixed-use development spanning about 43,280 square metres in gross floor area, comprising a 21-storey commercial building and two basement levels of offices, shopping podium and car parks on Orchard Road.

The acquisition is expected to be accretive to the group’s underlying earnings upon completion. Hongkong Land posted an underlying profit of US$259 million for the six months ended June 30, up 11 per cent from US$233 million in the corresponding year-ago period. The increase was due to lower net financing charges from active capital recycling.

Its Singapore office portfolio “continued to perform strongly”, with positive rental reversions and average rents rising to S$11.90 per square foot (psf), compared to S$11.40 psf in the year-ago period.

Hongkong Land will invest additional equity to maintain its existing majority stake in the fund alongside other investors, and will earn extra management fees from the increase in AUM.

SCPREF, described as Singapore’s largest commercial real estate private fund, was launched in February this year. Hongkong Land previously injected its one-third interests in Marina Bay Financial Centre (MBFC) Towers 1 and 2, Marina Bay Link Mall as well as One Raffles Quay into the fund.

The sale of Wheelock Place comes as Hong Kong’s Wharf Group also seeks to sell another Singapore asset. The Business Times earlier reported that the company had put its Scotts Square mall back on the market for S$380 million, about 15 per cent below the S$450 million guide price sought in 2024. Some 10 parties were said to be interested, including fund-type investors.