Sinar Mas Land is in exclusive talks to buy Brockton Capital’s 33 Horseferry Road, SW1 for around £225m – a 3.44% yield.
The Indonesian conglomerate has placed the Victoria building under offer on which a new 17-year index-linked lease to the Department for Transport was agreed earlier this year.
Brockton is selling the building for close to £10m above the asking price having instructed JLL to market the 180,000 sq ft property in March. The fund manager is due to make a healthy profit on its investment, having bought 33 Horseferry Road in 2015 from Alchemi Group for £137m.
The property also has an existing residential planning consent, which was granted in 2014, for 122 luxury flats and a further 23 affordable and 14 intermediate homes but Sinar Mas is not expected to implement it given the long-term nature of the income.
Prior to agreeing the lease with the Department for Transport, Brockton Capital with Stiff & Trevillion and Landid had drawn up refurbishment plans to create an additional 60,000 sq ft over two floors within the residential planning consent.
In 2015, Sinar Mas Group bought the Alphabeta building at 4-18 Finsbury Square, EC2. In 2014, the Indonesian investor purchased the freehold of 10 Great Pulteney Street, W1, from GE Capital for £57m. It made its debut London deal in Covent Garden in 2013, buying the New Brook Buildings, WC2, from Henderson Global Investors for £84m.
The company has previously stated an intention to strengthen its London portfolio in order to diversify its predominantly Indonesia-sourced income streams.
Sinar Mas Group is one of the largest conglomerates in Indonesia and was founded by Chinese Indonesian magnate Eka Tjipta Widjaja. The company operates across a variety of sectors through subsidiaries such as Asia Pulp & Paper and palm oil producer PT SMART. It has interests in real estate, financial services, agribusiness, telecommunications and mining, with multiple businesses listed on the Indonesian and Singapore stock exchanges.
CBRE acted for Sinar Mas. All parties declined to comment.
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