Singapore’s CapitaLand buys business park in UK for £129m

Singapore's CapitaLand buys business park in UK for £129m
Arlington Business Park in Reading Photo: Courtesy of CapitaLand

CapitaLand, one of Asia’s largest diversified real estate groups, headquartered and listed in Singapore, has signed an agreement to acquire Arlington Business Park, a prime freehold business park in the United Kingdom for £129.3 million (S$226.9 million). 

The acquisition will expand CapitaLand’s assets under management (AUM) in Europe to S$4.8 billion, further strengthening the Group’s investment portfolio in the developed markets, said the company.

Arlington Business Park is a business park located in Reading, a city over 60 km west of London. The business park comprises 11 Grade A office buildings totalling about 367,000 square feet (sq ft) of net lettable area (NLA).

The business park is conveniently located close to Junction 12 of the M4 motorway, one of UK’s key motorways, providing excellent connectivity for tenants. The London Heathrow International Airport is only a 30-minute drive from the business park. The Theale train station is five-minute walk away from the business park, offering direct access to London within 40 minutes. The Crossrail train line, which is due to open in 2021 will further improve connectivity, reducing travelling time into Central London.

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With increased clarity post Brexit, the acquisition is timely as general business sentiment has improved.

“The portfolio of 11 income-generating prime freehold business park buildings offers CapitaLand meaningful scale in the UK’s business park and regional office sector.  With increased clarity post Brexit, the acquisition is timely as general business sentiment has improved.  Demand for office space in the UK persists and prime office rental rates in key UK cities, including Reading, are also expected to grow between 1% and 5% over the next two years. Arlington Business Park is well-positioned to enjoy rental upside from vacancies and reversions.  The UK offers strong fundamentals such as a resilient economy and transparency, and we look forward to expanding our presence in the UK and Europe,” said Gerald Yong, Chief Executive Officer, CapitaLand International.

“The acquisition of Arlington Business Park is part of CapitaLand’s plan to increase our investments in developed markets such as Europe, Japan and the USA.  Our strengthened presence in Europe will enable the Group to maintain a balanced portfolio between emerging and developed markets,” said Jason Leow, President, Singapore & International, CapitaLand Group.

In Europe, CapitaLand currently owns and operates more than 70 properties across the office, logistics and lodging sectors.  These assets are located predominantly in the developed markets of France, Germany and the UK.