The Urban Redevelopment Authority (URA) is expected to release more transitional office sites after the maiden tender yesterday for a plot on a 15-year lease next to Newton MRT Station attracted a whopping 11 bids.
The highest offer of $37 million or $219 per square foot of potential gross floor area came from Scotts Spazio, a joint venture between Hwa Hong Corporation unit Singapore Warehouse and KOP Capital.
Hwa Hong and KOP are believed to be weighing their options, but some observers suggest they may have placed their bid - which was 19 per cent more than the next highest offer from a unit of Sin Soon Lee Realty - with a view to developing the site into offices for lease to a single tenant, possibly in the insurance business.
Some market watchers tip the potential tenant as Prudential, which has been looking for space to expand.
The 1.04-hectare site can be built up to 168,627 sq ft of gross floor area, yielding about 140,000 sq ft net lettable area of offices.
‘Based on the highest bid submitted, the breakeven cost for a new project on the site is likely to be around $500 psf per plot ratio, and this would provide the successful bidder with a decent yield of around 12 per cent for the 15-year leasehold site, based on a gross monthly rent of about $6.50 psf,’ said CB Richard Ellis executive director Li Hiaw Ho.
‘This sort of rental level is roughly half what a tenant would pay for similar size office space in the CBD.’
Interestingly, KOP Capital has a tie-up with a unit of Emirates Investment Group to develop a condo on the Hotel Asia site further down Scotts Road.
The other parties that bid in yesterday’s tender include Sim Lian Land; MV Land, controlled by Lim Kim Hong and Lim Huixing; Hersing Corporation; United Engineers; Sino Holdings; Newton Centre, owned by Ho Kiau Seng, Phua Seng Hua Paul and Lau Kau Chin; and Khai Wah Development, part of Ho Lee Group.
Wing Tai and Soilbuild Group placed the lowest bids, of $74 psf ppr and $61 psf ppr respectively.
Market watchers expect URA to release more transitional office sites soon, given the strong demand in yesterday’s tender.
URA extended the lease period for the Scotts Road plot from an initial 10 years to 15 years after market feedback that most investors wanted a longer lease period to recoup their outlay and cater to potential tenants’ requirements.
Transitional office sites are one of the government’s initiatives to provide short-term relief from the office space crunch. In addition, URA has stepped up mid and longer-term office supply by offering more 99-year leasehold plots that can be developed into offices in the CBD.
These include two commercial plots in Anson Road, as well as several sites with minimum stipulated office components - two ‘white’ sites at Marina View near One Shenton, the former Beach Road camp, and a ‘white’ site above Outram Park MRT Station.
The tender for a plot in Anson Road closed last month and the site was awarded to a Mapletree Investments unit at $1,021 psf per plot ratio. The Beach Road tender closed last month and is being evaluated under a dual-envelope system under which the concepts proposed by tenderers will have to be acceptable before their price envelopes are opened.
The tender for the second plot in Anson Road closes on Aug 28 and that for the first plot at Marina View closes on Sept 19. The tender for the plot nearby is slated to close on Nov 13.
Source : Business Times - 23 Aug 2007
Thursday, August 23, 2007
CapitaLand will gain full ownership of One George Street
CapitaLand will gain full ownership of One George Street if negotiations to buy German insurer Ergo’s 50 per cent stake in the 23-storey award-winning office building are successful.
BT understands that the Singapore-listed property company is in talks to buy Ergo’s half-stake for about $2,500 per square foot of net lettable area - or higher.
At $2,500 psf, the building would be priced at just over $1.1 billion and the half-share CapitaLand would buy from Ergo would be worth about $560 million.
CapitaLand and Ergo, a member of Munich Re Group, own roughly equal stakes in the property through their equally owned Eureka Office Fund.
One George Street, completed in late 2004, was a redevelopment of the former Pidemco Centre in South Bridge Road.
It was one of three assets that CapitaLand pumped into the $875 million Eureka Office Fund in 2001. The other two were stakes in The Adelphi and Temasek Tower.
Earlier this year, CapitaLand and Eureka sold their stakes in Temasek Tower to Macquarie Global Property Advisors Group for $1.04 billion or $1,550 psf.
Temasek Tower is on a site with about 74 years of the original 99-year lease remaining.
CapitaLand Group CEO Liew Mun Leong revealed later that the group’s listed CapitaCommercial Trust (CCT) made an offer for Temasek Tower but it was less than Macquarie’s.
As for CapitaLand’s decision to buy the rest of One George Street, a market watcher said: ‘Maybe they see greater upside there because it was developed on a fresh 99-year lease, boasts big floor plates of about 30,000 sq ft and is closer to the Raffles Place area.’
Analysts reckon CapitaLand may be seeking full ownership of One George Street with a view to injecting it into CCT when it generates sufficient yields as leases are renewed at higher rates.
Agreeing, another industry observer said One George Street recently received a tenancy offer for a 4,000 sq ft space at a whopping $16.50 psf a month, but this was rejected by the owners, who may be eyeing even more.
‘When the present leases at One George Street were signed, the office market was weak,’ an analyst said. But there is upside now as leases are renewed and new leases signed, given the surge in office rents over the past two years.
Major tenants at One George Street include the Royal Bank of Scotland, Legg Mason, hedge fund manager Tudor, Man Financial and Lloyds.
At CapitaLand’s recent Q2 results briefing, Mr Liew said ‘the Singapore office sector will remain a core holding’ for the group but that it will reconstitute its portfolio by selling some office assets and investing in new developments.
One George Street has almost 450,000 sq ft of net lettable area and has won awards for its architecture and landscaping.
It has four skyrise gardens, the biggest of which is on the fifth floor and accessible to the public.
As for The Adelphi in the City Hall area, the Eureka fund initially had full ownership of the 999-year leasehold property but later sold some units, leaving it with 62 per cent of share values, according to a report in February this year.
There are plans for a collective sale of The Adelphi, which will provide Eureka an exit. The fund is expected to be wound up once the last of its three assets has been divested.
Source : Business Times - 23 Aug 2007
BT understands that the Singapore-listed property company is in talks to buy Ergo’s half-stake for about $2,500 per square foot of net lettable area - or higher.
At $2,500 psf, the building would be priced at just over $1.1 billion and the half-share CapitaLand would buy from Ergo would be worth about $560 million.
CapitaLand and Ergo, a member of Munich Re Group, own roughly equal stakes in the property through their equally owned Eureka Office Fund.
One George Street, completed in late 2004, was a redevelopment of the former Pidemco Centre in South Bridge Road.
It was one of three assets that CapitaLand pumped into the $875 million Eureka Office Fund in 2001. The other two were stakes in The Adelphi and Temasek Tower.
Earlier this year, CapitaLand and Eureka sold their stakes in Temasek Tower to Macquarie Global Property Advisors Group for $1.04 billion or $1,550 psf.
Temasek Tower is on a site with about 74 years of the original 99-year lease remaining.
CapitaLand Group CEO Liew Mun Leong revealed later that the group’s listed CapitaCommercial Trust (CCT) made an offer for Temasek Tower but it was less than Macquarie’s.
As for CapitaLand’s decision to buy the rest of One George Street, a market watcher said: ‘Maybe they see greater upside there because it was developed on a fresh 99-year lease, boasts big floor plates of about 30,000 sq ft and is closer to the Raffles Place area.’
Analysts reckon CapitaLand may be seeking full ownership of One George Street with a view to injecting it into CCT when it generates sufficient yields as leases are renewed at higher rates.
Agreeing, another industry observer said One George Street recently received a tenancy offer for a 4,000 sq ft space at a whopping $16.50 psf a month, but this was rejected by the owners, who may be eyeing even more.
‘When the present leases at One George Street were signed, the office market was weak,’ an analyst said. But there is upside now as leases are renewed and new leases signed, given the surge in office rents over the past two years.
Major tenants at One George Street include the Royal Bank of Scotland, Legg Mason, hedge fund manager Tudor, Man Financial and Lloyds.
At CapitaLand’s recent Q2 results briefing, Mr Liew said ‘the Singapore office sector will remain a core holding’ for the group but that it will reconstitute its portfolio by selling some office assets and investing in new developments.
One George Street has almost 450,000 sq ft of net lettable area and has won awards for its architecture and landscaping.
It has four skyrise gardens, the biggest of which is on the fifth floor and accessible to the public.
As for The Adelphi in the City Hall area, the Eureka fund initially had full ownership of the 999-year leasehold property but later sold some units, leaving it with 62 per cent of share values, according to a report in February this year.
There are plans for a collective sale of The Adelphi, which will provide Eureka an exit. The fund is expected to be wound up once the last of its three assets has been divested.
Source : Business Times - 23 Aug 2007
Wednesday, August 22, 2007
SENTOSA Cove Pte Ltd (SCPL) yesterday released another three 99-year leasehold bungalow plots for sale
SENTOSA Cove Pte Ltd (SCPL) yesterday released another three 99-year leasehold bungalow plots for sale, after reporting new benchmarks being set for waterway and fairway facing plots in the upscale locale.
After the latest offer, the only sites the master developer will have left for sale are two more individual bungalow plots, a man-made island (which can be developed for 19 bungalows) and a plum condo plot at the mouth of the marina.
In all, the developer will have sold plots for a total of about 2,500 homes since October 2003.
SCPL said yesterday that an expression of interest (EOI) for four bungalow parcels that closed in July saw a new benchmark price of $1,233 per square foot of land area being achieved for a waterway bungalow lot, surpassing the $960 psf previous record for such land set earlier this year.
The other two waterway plots offered in the July EOI were also sold at above $960 psf. The sole fairway bungalow site in that EOI fetched $1,065 psf, surpassing the previous high of $910 psf for such sites achieved earlier this year.
The last seafront bungalow plot at Sentosa Cove was sold for a record $1,473 psf during an EOI in May, surpassing the top price of $1,308 psf previously for such plots seen at an EOI late last year.
SCPL’s latest EOI, which is being launched tomorrow, is for three bungalow sites - all waterway-fronting plots, one of which also boasts nearby views of, but is not directly fronting, the Tanjong Golf Course and the sea.
This plot has a land area of 6,941 sq ft. The other two plots are 7,414 sq ft and 10,663 sq ft.
The EOI closes on Sept 4, with the award being based solely on price.
Credo Real Estate managing director Karamjit Singh predicts that the three latest waterway plots could fetch prices ranging from $1,100 to $1,300 psf, with scarcity value raising the price.
Following this EOI sale, the last two individual bungalow plots at Sentosa Cove - both of which face fairways - will be sold by private treaty.
Pearl Island and a coveted high-rise condo plot (dubbed C-13) at the entrance to Sentosa Cove’s marina basin will be offered for sale before the year runs out.
Source : Business Times - 22 Aug 2007
After the latest offer, the only sites the master developer will have left for sale are two more individual bungalow plots, a man-made island (which can be developed for 19 bungalows) and a plum condo plot at the mouth of the marina.
In all, the developer will have sold plots for a total of about 2,500 homes since October 2003.
SCPL said yesterday that an expression of interest (EOI) for four bungalow parcels that closed in July saw a new benchmark price of $1,233 per square foot of land area being achieved for a waterway bungalow lot, surpassing the $960 psf previous record for such land set earlier this year.
The other two waterway plots offered in the July EOI were also sold at above $960 psf. The sole fairway bungalow site in that EOI fetched $1,065 psf, surpassing the previous high of $910 psf for such sites achieved earlier this year.
The last seafront bungalow plot at Sentosa Cove was sold for a record $1,473 psf during an EOI in May, surpassing the top price of $1,308 psf previously for such plots seen at an EOI late last year.
SCPL’s latest EOI, which is being launched tomorrow, is for three bungalow sites - all waterway-fronting plots, one of which also boasts nearby views of, but is not directly fronting, the Tanjong Golf Course and the sea.
This plot has a land area of 6,941 sq ft. The other two plots are 7,414 sq ft and 10,663 sq ft.
The EOI closes on Sept 4, with the award being based solely on price.
Credo Real Estate managing director Karamjit Singh predicts that the three latest waterway plots could fetch prices ranging from $1,100 to $1,300 psf, with scarcity value raising the price.
Following this EOI sale, the last two individual bungalow plots at Sentosa Cove - both of which face fairways - will be sold by private treaty.
Pearl Island and a coveted high-rise condo plot (dubbed C-13) at the entrance to Sentosa Cove’s marina basin will be offered for sale before the year runs out.
Source : Business Times - 22 Aug 2007
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