Category Archives: REITS

Starhill Reit raises rents under Ngee Ann City’s Toshin master lease

STARHILL Global Reit on Wednesday announced the new base rents for its Toshin master lease, which is 5.5 per cent higher than the existing rate, and is effective for three years starting June 8, 2016.

The rate is based on the average of three market rental valuations done by independent licensed valuers.

The Toshin master lease accounted for about a fifth of the Reit’s portfolio gross rent in March 2016. It covers all the retail strata area of Ngee Ann City owned by the Reit, except level five. Toshin is also the Reit’s largest tenant.

The master lease to Toshin provides the Reit with potential rental upside every three years. Together with the agreed extension of its Malaysia properties’ master tenancies, whereby the annual rent was revised upwards by about 6.67 per cent, this means that about a third of the Reit’s gross rent has secured an increase starting from June 2016.

The latest rent increase was in line with what some analysts had expected, after the rental dispute broke out between Takashimaya and its landlord, Ngee Ann Development in the High Court.

Ngee Ann is proposing to revise the rent to S$19.83 per square foot per month (psf pm), more than double the rent in 2014 of S$8.78 psf pm. This is superior to the approximately S$15 psf pm rental that Starhill currently gets from Toshin. Analysts had believed that this would give Starhill clout to demand more in its own rent from its master lessee, Toshin.

The Reit owns 27.2 per cent of the share value of the strata lots at Ngee Ann City, with Ngee Ann owning the rest. The dispute does not involve Starhill as the space occupied by Takashimaya is not part of its portfolio.

CapitaLand Commercial Trust to buy remaining 60% stake in CapitaGreen for S$393m

CapitaLand Commercial Trust (CCT), Singapore’s largest office real estate investment trust, will acquire the remaining 60 per cent stake it does not own in the CapitaGreen office tower for S$393 million.

CCT will buy a 50 per cent share from CapitaLand group and another 10 per cent share from Mitsubishi Estate Asia, the company said in a filing to the Singapore Exchange on Monday (May 23).

The purchase will be funded through borrowings from committed bank facilities, CCT said.

CapitaLand said in a separate exchange filing that the acquisition price is based on CapitaGreen’s agreed market value of S$1.6 billion (S$2,276 per square foot), which is the average of two independent valuations.

CCT will exercise a call option to acquire the stakes. This call option is part of a joint venture agreement signed in 2011 and is conditional on market valuation being equal to or above the hurdle price of S$1.59 billion, CapitaLand said.

The developer added that it will make a profit of about S$196 million from the sale of its stake.

Completed in December 2014, CapitaGreen is a Grade A office tower developed on the site of the former Market Street Car Park. The building has a net lettable area of about 703,000sqft, and has an occupancy of 92.8 per cent as of Mar 31.

Source : Channel NewsAsia – 23 May 2016