ACESO LIFE SCI (00474) announced that the Group entered into an amendment and restatement agreement (amending and restating the 2018 loan agreement) (2025 Loan Agreement) with various lenders and agents on September 16, 2025. The lenders have agreed to provide loans with a total principal amount of approximately £87.3 million (New Loan Arrangement), subject to satisfaction of the conditions precedent set forth therein, for a term of 3 years with an option to extend for 1 year.
The new financing arrangement will be secured by, among other things, a pledge of shares in the corporate entity indirectly holding the commercial property located at 55 Mark Lane, London EC3R 7NE, the United Kingdom (UK Property) and a mortgage over the UK Property. The new financing arrangement will be used to provide refinancing arrangements for the 2018 loan agreement and to fund additional capital expenditure related to the UK Property.
Once the 2025 Loan Agreement is implemented, the Company intends to carry out major renovations on the UK Property. It is expected that capital expenditure of approximately £17 million will be invested to upgrade major facilities and amenities to enhance tenant experience and overall attractiveness, thereby increasing the value of the UK Property.
The UK Property is located in the traditional business district in central London, United Kingdom. The building is currently mainly leased by well-known insurance companies and financial institutions, with an overall occupancy rate of approximately 84%. The Company has a dedicated team responsible for the management of the UK Property, including executive directors and representatives from legal, financial and secretarial departments.
Over the past three to four years, the UK property market has continued to be volatile. Market uncertainty has led to refinancing difficulties and hindered new tenant recruitment. However, in 2025, research reports from several well-known consulting firms indicate that the London office market has shown signs of recovery.
As the UK Property ages, the property has shown signs of fatigue. The Company is determined to formulate appropriate business strategies for the property. In particular, management is actively exploring various possible ways to enhance the rental value of the building and seeking financing solutions to support asset enhancement plans. The engineering work includes but is not limited to energy efficiency and sustainability improvements, lobby renovation, elevator upgrades, commuting facility improvements and building management system updates.
According to the business plan and consultations with tenants, most tenants have expressed willingness to renew their leases and extend their lease terms. The strategic focus is on improving building energy efficiency and aesthetics, while potentially reducing service fees to achieve rental growth through lease renewals.
As of the date of this announcement, through active negotiations, the Company has successfully completed a lease renewal covering 7% of the building's net leasable area at higher rent. As the market recovers, the company will engage in deeper dialogue with tenants and other service providers and contractors to optimize the scope of proactive upgrade plans and discuss expansion and tenant area renovation solutions.
Over the next 2 to 3 years, strict budget management and review of related projects will be required. It is expected that the assets will stabilize thereafter and achieve sustainable operations through long-term leasing arrangements.