THE average capital value of luxury apartments in Singapore has risen 43.5 per cent in the first nine months of this year since the fourth quarter of 2006. At $2,827 psf, the Q3 2007 average luxury apartment cap value has surpassed 1997’s peak level by 59 per cent, according to a report by Colliers International issued yesterday.
In the leasing market, average monthly gross rents of luxury apartments were up 27.9 per cent in the first nine months of the year. The increase was at a faster clip in the third quarter of this year, with a quarter-on-quarter gain of 10.2 per cent to $6.86 per square foot a month. This was higher than earlier rises of 7.9 per cent and 7.6 per cent in Q2 and Q1.
‘The supply crunch, coupled with strong demand, continued to contribute to escalating rental growth, a growing concern among the expatriate population in the Republic and the government,’ Colliers noted.
The average cap value of luxury apartments rose 13.3 per cent in Q3 over the preceding quarter to $2,827 psf.
The property consultancy firm predicts that average capital values and monthly gross rents of luxury apartments will rise by up to 10 per cent in the final quarter of the year. But it acknowledged the downside risks in the coming months, including the negative spillover from the US housing market and potential negative oil supply shocks.
‘Nevertheless, the strong economic and demand fundamentals in the Singapore market, coupled with the continuing commitment of the government to maintain Singapore’s attractiveness as a stable market for investments, should lend support to the private residential property market amid cautious sentiments,’ the report added.
Colliers also highlighted the government’s assurance that it would continue to monitor the market and ensure that prices do not run ahead because of a shortage of supply.
Earlier this month, the Urban Redevelopment Authority said that it was reviewing the Government Land Sales programme for the first half of next year and that the government would make available more sites for private residential development through the GLS programme next year if the demand continues to remain strong.
Source : Business Times - 13 Oct 2007
Showing posts with label Colliers International. Show all posts
Showing posts with label Colliers International. Show all posts
Saturday, October 13, 2007
Friday, August 10, 2007
As prices of luxury property continue their seemingly unstoppable climb, the heat is on developers to give buyers more bang for their buck.
As prices of luxury property continue their seemingly unstoppable climb, the heat is on developers to give buyers more bang for their buck. And they are rising to the challenge by offering more “”exclusive’’ projects with fewer, bigger units full of fancy trimmings.
Some 39 luxury projects with a total of more than 3,600 units could be launched this year, says Colliers International. And about two-thirds of these developments will have 100 units or less.
The number of units per project is shrinking as apartments get bigger, market watchers say. For example, penthouse sizes have grown by 20-100 per cent since the 1990s, according to Colliers’ director of research and consultancy Tay Huey Ying.
“”In the 1990s, penthouses were usually about 3,500-5,000 square feet,’’ she says. “”Today we are looking at more and more penthouses in the range of 7,000 sq ft and above.’’
Developers are also throwing in goodies such as European designer fittings, spas in all apartments and a separate pool for each unit to sweeten the pot.
“”As prices go up, people expect more,’’ Koh Brothers chief executive Francis Koh told BT.
“”If you buy a new unit instead of a resale unit, it has to be value-added. So we need to innovate.’’
Luxury home prices in Singapore are indeed on the way up.
In just the first quarter of 2007, prices of uncompleted projects in the Core Central Region - which includes Districts 9, 10, 11, Marina Bay and Sentosa - rose 7.3 per cent.
And for the whole of 2006, prices of uncompleted projects in these prime areas rose 25.4 per cent. With prices expected to keep climbing for the rest of the year, developers are getting creative, making sure their offerings have the works.
SC Global Developments has a few firsts in mind. Its Marq On Paterson Hill will feature one tower with a 15-metre private lap pool in every apartment on every floor. The Marq is expected to be launched this year at upwards of $2,800 per square foot.
And another SC Global project, Hilltops, promises a resort-style steam spa in every apartment. Hilltops is expected to be launched this year at $2,500 to $3,000 psf.
Similarly, Koh Brother’s 53-unit The Lumos, in the Leonie Hill area, will have a sky garden on every floor. Every unit will open on to a landscaped plot of green living space, which Koh Brothers says will provide residents with “”a refreshing sanctuary and an access to nature that is unrivalled among high-rise developments’’.
Besides exclusives like these, developers are splashing out to install the latest designer fittings in their apartments.
At The Lumos, each unit will come with an Italian-made Visentin Rainbow Shower, so you can change the backlight colours to suit your mood while showering. The master bathroom in each unit will be walled with Strass Swarovski Crystal tiles.
And in what the company says is another first, the exterior-facing bathroom windows are made of Liquid Crystal Glass, so you can turn from frosted to clear at the flick of a switch.
With features such as these, says Colliers’ Ms Tay, developers are trying to create a lifestyle that sells their apartments.
But some analysts say all the extras are adding to the cost - which again leads to increased prices.
“”It’s a cycle,’’ said an analyst with a foreign brokerage here. “”People pay more, so the developers spend more money to justify the price. And this again drives prices up.’’
But with luxury home prices still continuing to climb, the trend can be expected to continue this year, the analyst said.
Some 39 luxury projects with a total of more than 3,600 units could be launched this year, says Colliers International. And about two-thirds of these developments will have 100 units or less.
The number of units per project is shrinking as apartments get bigger, market watchers say. For example, penthouse sizes have grown by 20-100 per cent since the 1990s, according to Colliers’ director of research and consultancy Tay Huey Ying.
“”In the 1990s, penthouses were usually about 3,500-5,000 square feet,’’ she says. “”Today we are looking at more and more penthouses in the range of 7,000 sq ft and above.’’
Developers are also throwing in goodies such as European designer fittings, spas in all apartments and a separate pool for each unit to sweeten the pot.
“”As prices go up, people expect more,’’ Koh Brothers chief executive Francis Koh told BT.
“”If you buy a new unit instead of a resale unit, it has to be value-added. So we need to innovate.’’
Luxury home prices in Singapore are indeed on the way up.
In just the first quarter of 2007, prices of uncompleted projects in the Core Central Region - which includes Districts 9, 10, 11, Marina Bay and Sentosa - rose 7.3 per cent.
And for the whole of 2006, prices of uncompleted projects in these prime areas rose 25.4 per cent. With prices expected to keep climbing for the rest of the year, developers are getting creative, making sure their offerings have the works.
SC Global Developments has a few firsts in mind. Its Marq On Paterson Hill will feature one tower with a 15-metre private lap pool in every apartment on every floor. The Marq is expected to be launched this year at upwards of $2,800 per square foot.
And another SC Global project, Hilltops, promises a resort-style steam spa in every apartment. Hilltops is expected to be launched this year at $2,500 to $3,000 psf.
Similarly, Koh Brother’s 53-unit The Lumos, in the Leonie Hill area, will have a sky garden on every floor. Every unit will open on to a landscaped plot of green living space, which Koh Brothers says will provide residents with “”a refreshing sanctuary and an access to nature that is unrivalled among high-rise developments’’.
Besides exclusives like these, developers are splashing out to install the latest designer fittings in their apartments.
At The Lumos, each unit will come with an Italian-made Visentin Rainbow Shower, so you can change the backlight colours to suit your mood while showering. The master bathroom in each unit will be walled with Strass Swarovski Crystal tiles.
And in what the company says is another first, the exterior-facing bathroom windows are made of Liquid Crystal Glass, so you can turn from frosted to clear at the flick of a switch.
With features such as these, says Colliers’ Ms Tay, developers are trying to create a lifestyle that sells their apartments.
But some analysts say all the extras are adding to the cost - which again leads to increased prices.
“”It’s a cycle,’’ said an analyst with a foreign brokerage here. “”People pay more, so the developers spend more money to justify the price. And this again drives prices up.’’
But with luxury home prices still continuing to climb, the trend can be expected to continue this year, the analyst said.
Wednesday, July 18, 2007
Proeprty Speculation by Individuals
Proeprty Speculation by Individuals
COLLIERS International has suggested that the authorities track multiple-unit purchases of private residential properties, which could be used to show the level of speculative activity.
Individuals who own several properties may dump them if the market softens and this exercise could potentially accelerate any property downfall, the property consultancy argued.
Colliers' director for research and consultancy Tay Huey Ying, said: 'So far, the government has been giving details on the number of subsale deals - which refer to secondary market transactions for projects that have yet to receive Certificate of Statutory Completion and are often seen as a proxy for speculative activity. That's useful information.
'But in addition to that, perhaps the government may also want to monitor and see the extent to which people are buying several units or even floors, particularly at new residential property launches, as that may also reflect an intent to speculate, that is, buying units with the aim of flipping them within a short period of time.'
When contacted, a spokeswoman for the Ministry of National Development said: 'The Urban Redevelopment Authority does not monitor multiple purchases by individuals. However, the government is monitoring the property market closely, to ensure that it remains healthy and sustainable.'
Ms Tay said she was more concerned with individuals who buy multiple units rather than than institutional investors like funds which make such purchases, since corporate buyers typically have greater financial muscle and are looking at holding their assets for rental income over a longer timeframe. 'Individuals are more likely to lack the financial muscle to hold on to their purchases if the market softens,' she said.
In addition to tracking those who buy multiple units or floors in the same development, Ms Tay also observed there were many individual investors who have been buying units across Singapore.
However, there was no mention of Major Funds who are investing in Singapore real estate as well as corporations buying into residential property also deserves monitoring, we at Exclusive Home feels.
Source - The Business Times
COLLIERS International has suggested that the authorities track multiple-unit purchases of private residential properties, which could be used to show the level of speculative activity.
Individuals who own several properties may dump them if the market softens and this exercise could potentially accelerate any property downfall, the property consultancy argued.
Colliers' director for research and consultancy Tay Huey Ying, said: 'So far, the government has been giving details on the number of subsale deals - which refer to secondary market transactions for projects that have yet to receive Certificate of Statutory Completion and are often seen as a proxy for speculative activity. That's useful information.
'But in addition to that, perhaps the government may also want to monitor and see the extent to which people are buying several units or even floors, particularly at new residential property launches, as that may also reflect an intent to speculate, that is, buying units with the aim of flipping them within a short period of time.'
When contacted, a spokeswoman for the Ministry of National Development said: 'The Urban Redevelopment Authority does not monitor multiple purchases by individuals. However, the government is monitoring the property market closely, to ensure that it remains healthy and sustainable.'
Ms Tay said she was more concerned with individuals who buy multiple units rather than than institutional investors like funds which make such purchases, since corporate buyers typically have greater financial muscle and are looking at holding their assets for rental income over a longer timeframe. 'Individuals are more likely to lack the financial muscle to hold on to their purchases if the market softens,' she said.
In addition to tracking those who buy multiple units or floors in the same development, Ms Tay also observed there were many individual investors who have been buying units across Singapore.
However, there was no mention of Major Funds who are investing in Singapore real estate as well as corporations buying into residential property also deserves monitoring, we at Exclusive Home feels.
Source - The Business Times
Friday, April 27, 2007
Two HDB residential sites to be sold by public tender
Two Housing & Development Board (HDB) residential sites on the government’s reserve list have attracted minimum committed bids and will now go on sale by public tender.
A 235,897.3-square-foot site at Bishan Street 22/25 - with a plot ratio of 3.5 - has drawn a minimum committed bid of $194 million or $235 per square foot per plot ratio (psf ppr).
And a 124,876.3-sq-ft site at Dakota Crescent, Geylang S5 - with plot ratio of 3.5 - has drawn a minimum committed bid of $115.8 million or $265 psf ppr. When the sites are eventually awarded, they will be the first solely private residential sites sold since April 2002 when NTUC Choice Homes and Chip Eng Leong Enterprise won the tender for a site in Ang Mo Kio for $244 psf ppr. NTUC Choice Homes did win an HDB commercial/residential site next to Yew Tee MRT Station for $308 psf ppr in September 2005, while a Guthrie-Lee Kim Tah-TMW consortium won an HDB commercial/residential site at Jurong West for $329 psf per two months earlier.
Colliers International director for investment sales Ho Eng Joo reckons projects on the two latest sites will attract HDB upgraders rather than investors.
He estimates the Bishan site could go for $260-$290 psf ppr and the Dakota Crescent site could fetch a higher $300-$350 psf ppr because it is nearer the city.
He sees breakeven cost will at more than $500 psf and $600 psf respectively.
Savills Research estimates the Bishan Street 22/25 site could go for $300-$400 psf ppr or $248 million-$330 million and the Dakota Crescent site for $275-$350 psf ppr or $120-$153 million.
Savills executive director (residential) David Neubronner said the Bishan site, close to several good schools and facing Bishan Park, could attract developers like NTUC Choice Homes, Far East Organization and Wing Tai, while the Dakota Crescent site, which is on the fringe of prime areas in eastern Singapore, could attract the likes of CapitaLand, Guocoland, Hong Leong and Far East Organization.
‘We would also not be surprised if they team up like what we saw happening at Casa Merah,’ Mr Neubronner said.
He also thinks that it is possible the same developer triggered the sale of both sites.
Savills expects prices of mass-market condominiums to rise 8-10 per cent this year.
Source: The Business Times, 24 April 2007
A 235,897.3-square-foot site at Bishan Street 22/25 - with a plot ratio of 3.5 - has drawn a minimum committed bid of $194 million or $235 per square foot per plot ratio (psf ppr).
And a 124,876.3-sq-ft site at Dakota Crescent, Geylang S5 - with plot ratio of 3.5 - has drawn a minimum committed bid of $115.8 million or $265 psf ppr. When the sites are eventually awarded, they will be the first solely private residential sites sold since April 2002 when NTUC Choice Homes and Chip Eng Leong Enterprise won the tender for a site in Ang Mo Kio for $244 psf ppr. NTUC Choice Homes did win an HDB commercial/residential site next to Yew Tee MRT Station for $308 psf ppr in September 2005, while a Guthrie-Lee Kim Tah-TMW consortium won an HDB commercial/residential site at Jurong West for $329 psf per two months earlier.
Colliers International director for investment sales Ho Eng Joo reckons projects on the two latest sites will attract HDB upgraders rather than investors.
He estimates the Bishan site could go for $260-$290 psf ppr and the Dakota Crescent site could fetch a higher $300-$350 psf ppr because it is nearer the city.
He sees breakeven cost will at more than $500 psf and $600 psf respectively.
Savills Research estimates the Bishan Street 22/25 site could go for $300-$400 psf ppr or $248 million-$330 million and the Dakota Crescent site for $275-$350 psf ppr or $120-$153 million.
Savills executive director (residential) David Neubronner said the Bishan site, close to several good schools and facing Bishan Park, could attract developers like NTUC Choice Homes, Far East Organization and Wing Tai, while the Dakota Crescent site, which is on the fringe of prime areas in eastern Singapore, could attract the likes of CapitaLand, Guocoland, Hong Leong and Far East Organization.
‘We would also not be surprised if they team up like what we saw happening at Casa Merah,’ Mr Neubronner said.
He also thinks that it is possible the same developer triggered the sale of both sites.
Savills expects prices of mass-market condominiums to rise 8-10 per cent this year.
Source: The Business Times, 24 April 2007
Tanjong Pagar reserve hotel site attracts $61m bid
A committed bid of $60.888 million has been received for a hotel site on the Government Land Sales (GLS) reserve list at Tanjong Pagar Road/Tras Street. The site will now be put up for public tender in about two weeks’ time.
Based on the committed bid price, the 30,844 sq ft site, which has a plot ratio of 5.6 and a maximum gross floor area (GFA) of 172,728 sq ft, works out to cost $352.5 per square foot per plot ratio (psf ppr).
Knight Frank head of research Nicholas Mak believes that the site could eventually fetch around $500 psf ppr.
The site is close to the Tanjong Pagar MRT station as well as office buildings like Capital Tower, Temasek Tower and Springleaf Tower. ‘A new hotel here will probably cater to cost-conscious business travellers and mid-tier tourists,’ Mr Mak said. The hotel could also be positioned as a four-star hotel with about 300 rooms.
Mr Mak said that the committed bid price appeared to be in line with those for other sites that have been put up for public tender recently. This is the second hotel site on the reserve list to be put up for tender this year. The first was in Tanjong Pagar Road/Gopeng Street last month, when the trigger price was $370 psf ppr.
In the West Coast, the Urban Redevelopment Authority has put a residential site at West Coast Crescent on the GLS reserve list.
The 129,166.8 sq ft site has a plot ratio of 2.8 and a maximum GFA of 361,667 sq ft. URA estimates that a development with 290 units can be built.
Colliers International director for investment sales Ho Eng Joo reckons the site could receive bids of $260 to $290 psf ppr. The break-even cost for the new development is likely to be around $600-$630 psf, depending on the cost of materials, he said.
The West Coast, particularly areas close to educational institutions like the National University of Singapore, has seen an influx of developments including Varsity Park and more recently Carabelle. Blue Horizon, which is next to the new site and was launched several years ago, is now selling for over $600 psf on the secondary market.
Source: The Business Times, 27 April 2007
Based on the committed bid price, the 30,844 sq ft site, which has a plot ratio of 5.6 and a maximum gross floor area (GFA) of 172,728 sq ft, works out to cost $352.5 per square foot per plot ratio (psf ppr).
Knight Frank head of research Nicholas Mak believes that the site could eventually fetch around $500 psf ppr.
The site is close to the Tanjong Pagar MRT station as well as office buildings like Capital Tower, Temasek Tower and Springleaf Tower. ‘A new hotel here will probably cater to cost-conscious business travellers and mid-tier tourists,’ Mr Mak said. The hotel could also be positioned as a four-star hotel with about 300 rooms.
Mr Mak said that the committed bid price appeared to be in line with those for other sites that have been put up for public tender recently. This is the second hotel site on the reserve list to be put up for tender this year. The first was in Tanjong Pagar Road/Gopeng Street last month, when the trigger price was $370 psf ppr.
In the West Coast, the Urban Redevelopment Authority has put a residential site at West Coast Crescent on the GLS reserve list.
The 129,166.8 sq ft site has a plot ratio of 2.8 and a maximum GFA of 361,667 sq ft. URA estimates that a development with 290 units can be built.
Colliers International director for investment sales Ho Eng Joo reckons the site could receive bids of $260 to $290 psf ppr. The break-even cost for the new development is likely to be around $600-$630 psf, depending on the cost of materials, he said.
The West Coast, particularly areas close to educational institutions like the National University of Singapore, has seen an influx of developments including Varsity Park and more recently Carabelle. Blue Horizon, which is next to the new site and was launched several years ago, is now selling for over $600 psf on the secondary market.
Source: The Business Times, 27 April 2007
Wednesday, April 25, 2007
Developer Hoi Hup Realty has bought a freehold residential site at Killiney Road for $115 million in a collective sale, the property firm marketing the project said yesterday.
Colliers International said that the price paid by Hoi Hup for Killiney Apartments works out to $1,022 per square foot per plot ratio (psf ppr), including an estimated development charge of $500,000.
The site was sold through an expression of interest exercise.
The 40,300 square feet site has a 2.8 plot ratio, which gives the site a gross floor area of 113,000 sq ft. The maximum building height is 10 storeys.
Hoi Hup could develop a 10-storey high condominium with 75 units with an average area of 1,500 sq ft each, said Colliers.
Killiney Apartments is at present a 16-storey development with 44 apartments. Each of the 44 owners will receive between $2.5 million and $2.8 million from the sale, Colliers said.
The site was put on the market for the second time in March this year with a $115 million price tag.
The site was first offered for $94-$96 million, which works out to about $835-$852 psf ppr, in June 2006. Then, the site was put on the market through a public tender, but offers were not satisfactory, said Ho Eng Joo, director of investment sales for Colliers.
‘I think the market growth was not very strong yet (last June),’ said Mr Ho. ‘Since then, the market sentiment has changed.’
For the sale, following an expression of interest from Hoi Hup, Colliers negotiated with the developer to raise the price to $115 million, Mr Ho said.
Source: The Business Times, 25 April 2007
Colliers International said that the price paid by Hoi Hup for Killiney Apartments works out to $1,022 per square foot per plot ratio (psf ppr), including an estimated development charge of $500,000.
The site was sold through an expression of interest exercise.
The 40,300 square feet site has a 2.8 plot ratio, which gives the site a gross floor area of 113,000 sq ft. The maximum building height is 10 storeys.
Hoi Hup could develop a 10-storey high condominium with 75 units with an average area of 1,500 sq ft each, said Colliers.
Killiney Apartments is at present a 16-storey development with 44 apartments. Each of the 44 owners will receive between $2.5 million and $2.8 million from the sale, Colliers said.
The site was put on the market for the second time in March this year with a $115 million price tag.
The site was first offered for $94-$96 million, which works out to about $835-$852 psf ppr, in June 2006. Then, the site was put on the market through a public tender, but offers were not satisfactory, said Ho Eng Joo, director of investment sales for Colliers.
‘I think the market growth was not very strong yet (last June),’ said Mr Ho. ‘Since then, the market sentiment has changed.’
For the sale, following an expression of interest from Hoi Hup, Colliers negotiated with the developer to raise the price to $115 million, Mr Ho said.
Source: The Business Times, 25 April 2007
The collective sale market shows no signing of slowing with four more sites put up for sale yesterday.
The most expensive is the 140-unit Grangeford Apartment, which sits on 130,982 sq ft of prime land on Grange Road.
Marketing agent CB Richard Ellis said the asking price is a whopping $660 million or about $2,016 per sq ft per plot ratio (psf ppr).
If the site is sold at that price, owners could reap up to $3.8 million for larger three-bedders - more than double the last sale price of $1.8 million in February.
The site is being marketed via an expression of interest exercise on May 25. So far, 72.5 per cent of owners have agreed - short of the 80 per cent required.
The 74-unit Rivershire on Leonie Hill Road is also up for sale through a May 29 expression of interest exercise. The 56,396 sq ft site is expected to fetch about $237 million - a land value of $1,500 psf ppr, said marketing agent Knight Frank.
Credo Real Estate is putting Nob Hill Condominium and two adjoining plots up for sale in a May 21 tender. The asking price for the Ewe Boon/Balmoral area sites is $95 million, or $1,100 psf ppr.
Colliers International has also put Fairways condominium in Telok Blangah up for sale in a May 16 tender. The successful buyer can combine the site with a 8,288 sq ft piece of state land, it said. The 146,532 sq ft site has an indicative land value of $238 million or $773 psf ppr.
Source: The Straits Times, 24 April 2007
The most expensive is the 140-unit Grangeford Apartment, which sits on 130,982 sq ft of prime land on Grange Road.
Marketing agent CB Richard Ellis said the asking price is a whopping $660 million or about $2,016 per sq ft per plot ratio (psf ppr).
If the site is sold at that price, owners could reap up to $3.8 million for larger three-bedders - more than double the last sale price of $1.8 million in February.
The site is being marketed via an expression of interest exercise on May 25. So far, 72.5 per cent of owners have agreed - short of the 80 per cent required.
The 74-unit Rivershire on Leonie Hill Road is also up for sale through a May 29 expression of interest exercise. The 56,396 sq ft site is expected to fetch about $237 million - a land value of $1,500 psf ppr, said marketing agent Knight Frank.
Credo Real Estate is putting Nob Hill Condominium and two adjoining plots up for sale in a May 21 tender. The asking price for the Ewe Boon/Balmoral area sites is $95 million, or $1,100 psf ppr.
Colliers International has also put Fairways condominium in Telok Blangah up for sale in a May 16 tender. The successful buyer can combine the site with a 8,288 sq ft piece of state land, it said. The 146,532 sq ft site has an indicative land value of $238 million or $773 psf ppr.
Source: The Straits Times, 24 April 2007
Saturday, March 24, 2007
MapletreeLog in 27.8b yen property deal
MapletreeLog in 27.8b yen property deal
March 23rd, 2007
Mapletree Logistics Trust yesterday said it is acquiring the beneficiary interest of five logistic properties in Japan for 27.8 billion yen (S$358.2 million).
Based on the letter of undertaking, the Reit will buy the beneficiary interest from a special-purpose company, which is managed by Itochu Corporation, and the transaction has been structured as an outright sale of beneficiary rights with assignment of existing tenancies.
Four of them - Atsugi Centre, Ayase Centre, Funabashi Centre and Zama Centre - are located in the Greater Tokyo area, while the Kyoto Centre is in the Kyoto (Kansai) area. The deal will be accretive to MapletreeLog’s distribution per unit and its pro forma effect for the year ended Dec 31, 2006 would be an additional 0.56 Singapore cents per unit.
Said Chua Tiow Chye, CEO of Mapletree Logistics Trust Management: ‘This portfolio of assets is accompanied by long-lease tenures which vary from seven to 18 years from tenants with very good credit standing, bolstering our core base of leases which yield stable and recurrent rental income.’
Also, he said the new facilities complement the Reit’s shorter-term leases from higher-growth markets such as China, Malaysia and Hong Kong. ‘The addition of these longer-term leases will lengthen the average lease tenure and the unexpired lease term of underlying land of MapletreeLog’s portfolio,’ Mr Chua added.
Besides providing geographical diversification, MapletreeLog said the acquired portfolio also comes with strong tenant base, including top Japanese third-party logistics (3PL) service providers and major supermarket suppliers.
The deal is MapletreeLog’s single-largest transaction to date, and is the trust’s second with Itochu. The trust had bought Gyoda Distribution Centre - its first property in Japan - from Itochu last month.
MapletreeLog expects the latest acquisition to be completed in the middle of this year, adding that it will be wholly funded by debt due to the lower cost of borrowing in yen.
Also, the trust will benefit ‘by structuring the acquisition in such a way that the properties’ net income inflows in yen will be exchanged for Singapore dollars through a currency swap. Based on prevailing forward contract rates, the average annual pick-up is estimated to be one to 2 per cent’, it said in a statement.
MapletreeLog is upbeat on prospects in Japan, pointing to its 2.2 per cent economic growth last year and citing forecast from the Economist Intelligence Unit that it may grow another 2 per cent this year and 2.1 per cent in 2008.
‘The improving economic conditions in Japan and the consequent increase in business activities have boosted demand for new logistics facilities,’ it said in a statement.
Another factor is the growing trend among companies to outsource their logistics operations to 3PL operators, as this allows them to streamline their balance sheets and focus their resources on core operations.
Citing Colliers International, MapletreeLog says demand for quality logistics space in Japan is picking up, driven by corporate capital investment.
‘There is a shortage of bigger, modern and efficient distribution centres located in key areas. Currently, modern distribution facilities that measure more than 3,000 square metres in floor area represent less than half of the total national stock in Japan,’ it added.
Source: The Business Times, 23 March 2007
March 23rd, 2007
Mapletree Logistics Trust yesterday said it is acquiring the beneficiary interest of five logistic properties in Japan for 27.8 billion yen (S$358.2 million).
Based on the letter of undertaking, the Reit will buy the beneficiary interest from a special-purpose company, which is managed by Itochu Corporation, and the transaction has been structured as an outright sale of beneficiary rights with assignment of existing tenancies.
Four of them - Atsugi Centre, Ayase Centre, Funabashi Centre and Zama Centre - are located in the Greater Tokyo area, while the Kyoto Centre is in the Kyoto (Kansai) area. The deal will be accretive to MapletreeLog’s distribution per unit and its pro forma effect for the year ended Dec 31, 2006 would be an additional 0.56 Singapore cents per unit.
Said Chua Tiow Chye, CEO of Mapletree Logistics Trust Management: ‘This portfolio of assets is accompanied by long-lease tenures which vary from seven to 18 years from tenants with very good credit standing, bolstering our core base of leases which yield stable and recurrent rental income.’
Also, he said the new facilities complement the Reit’s shorter-term leases from higher-growth markets such as China, Malaysia and Hong Kong. ‘The addition of these longer-term leases will lengthen the average lease tenure and the unexpired lease term of underlying land of MapletreeLog’s portfolio,’ Mr Chua added.
Besides providing geographical diversification, MapletreeLog said the acquired portfolio also comes with strong tenant base, including top Japanese third-party logistics (3PL) service providers and major supermarket suppliers.
The deal is MapletreeLog’s single-largest transaction to date, and is the trust’s second with Itochu. The trust had bought Gyoda Distribution Centre - its first property in Japan - from Itochu last month.
MapletreeLog expects the latest acquisition to be completed in the middle of this year, adding that it will be wholly funded by debt due to the lower cost of borrowing in yen.
Also, the trust will benefit ‘by structuring the acquisition in such a way that the properties’ net income inflows in yen will be exchanged for Singapore dollars through a currency swap. Based on prevailing forward contract rates, the average annual pick-up is estimated to be one to 2 per cent’, it said in a statement.
MapletreeLog is upbeat on prospects in Japan, pointing to its 2.2 per cent economic growth last year and citing forecast from the Economist Intelligence Unit that it may grow another 2 per cent this year and 2.1 per cent in 2008.
‘The improving economic conditions in Japan and the consequent increase in business activities have boosted demand for new logistics facilities,’ it said in a statement.
Another factor is the growing trend among companies to outsource their logistics operations to 3PL operators, as this allows them to streamline their balance sheets and focus their resources on core operations.
Citing Colliers International, MapletreeLog says demand for quality logistics space in Japan is picking up, driven by corporate capital investment.
‘There is a shortage of bigger, modern and efficient distribution centres located in key areas. Currently, modern distribution facilities that measure more than 3,000 square metres in floor area represent less than half of the total national stock in Japan,’ it added.
Source: The Business Times, 23 March 2007
Subscribe to:
Posts (Atom)
