SINGAPORE (Jan 23): Metro Holdings has formed a 50:50 joint venture with Singapore-based Lee Kim Tah Group to jointly acquire a freehold office property at 5 Chancery Lane in London for a total of £80.8 million ($148.2 million).

The total purchase consideration includes the related stamp duty as well as estimated fees and expenses amounting to £4.75 million.

The property is a freehold office building with 84,836 sq ft of office and ancillary facilities arranged over eight floors.

Currently fully leased until 2023, it is located in a central and traditional office location in the heart of Midtown Central London.

According to Metro in a filing to SGX on Tuesday, the property produces a current annual rental income of approximately £4.0 million per annum, reflecting a low average rent of £47.15 psf, which offers an opportunity for positive rental reversion.

The current annual rent reflects an initial gross yield of 4.95%.

“The investment represents an excellent proposition to acquire a freehold property in one of London’s leading occupational sub-markets with the future ability to enhance returns via multiple active management strategies,” Metro says.

“Despite the uncertainties of Brexit, London still remains attractive as one of the world’s leading global financial hub and business centres,” the group adds.

The acquisition will be financed by internal funds and bank borrowings.

Metro says the acquisition is not expected to have any significant effect on its consolidated net tangible asset per share and its consolidated earnings per share for the current financial year ending Mar 31, 2018.

Shares of Metro closed flat at $1.19 on Tuesday.