Tag Archives: Alpha Investment Partners

Alpha fund buys rest of 78 Shenton Way

A PROPERTY fund managed by Alpha Investment Partners has taken full ownership of 78 Shenton Way after buying out partner Commerz Real’s half stake in the asset.

Alpha Investment Partners is part of Keppel Corporation.

The transaction, said to have been done three weeks ago, was effected through the sale of shares in the special purpose vehicle that holds 78 Shenton Way. The deal priced the entire property (100 per cent interest) at about S$603 million or S$1,665 per square foot on its total net lettable area (NLA) of 362,199 sq ft, BT understands.

Hence the half-stake works out to S$301.5 million.

The development comprises two towers built at different times on a site with a balance lease term of 66 years.

The S$1,665 psf pricing for the transaction is said to reflect a net yield of around 4 per cent.

Commerz Real of Germany, which held the half-stake in 78 Shenton Way through an open-ended global fund that it manages, last year appointed CBRE to find a buyer for its stake. Potential buyers are believed to have submitted their offers late last year with competitive bids. BT understands that Alpha did not express interest at that stage; nor did it have a first right of refusal on Commerz Real’s stake.

Alpha is said to have entered the picture earlier this year; Commerz Real may have chosen to work with its existing partner in the asset for deal certainty. The Alpha fund also had the advantage of being familiar with the asset and could transact swiftly.

The older Tower 1, which is 34 storeys high, is a granite-clad building with NLA of 284,622 sq ft. Completed in 1988, it has unobstructed sea views beyond the Tanjong Pagar container terminal.

Tower 1′s occupancy is 95 per cent, with a variety of tenants including IPP Financial Advisors and companies in the shipping and related businesses.

The 11-storey Tower 2, which was completed in 2009, is a glass-clad office block built to Grade A office specifications. Its 77,577 sq ft NLA is fully let; a chunk of the space in this tower is leased to AIG till late-2019.

Based on a BT report last October, the average monthly passing rent for Tower 1 is around S$6.70 psf, and that for the newer Tower 2, in the region of S$9.50 psf.

Going by 78 Shenton Way’s current gross floor area (GFA) of close to 494,400 sq ft, there is no untapped GFA. That said, there is potential to extract a higher NLA in the older block – for instance, by relocating the air handling units and reconfiguring the lift core and lift lobbies. Furthermore, the existing granite exterior may be replaced with floor-to-ceiling glass – to maximise sea views.

In a separate transaction, a 999-year leasehold shophouse at 83 Amoy Street has been sold for S$20.25 million. Standing on a 2,795 sq ft site, the four-storey property has a gross floor area of around 8,400 sq ft.

The buyer is a vehicle linked to Spanish tycoon Ricardo Peralta; the seller is Rikvin Properties, the owners of which are involved in the corporate service and consultancy group. PropNex brokered the deal.

Last year, Rikvin sold a pair of adjoining shophouses along Telok Ayer Street to the same vehicle controlled by Mr Peralta, for S$18.2 million.

Another recent shophouse deal was 37 Craig Road, which went for S$6.5 million. The three-storey property is on a site with about 72 years’ balance lease. The buyer is boutique property investment group 8M Real Estate and the seller, The Composers and Authors Society of Singapore. Historical Land brokered the sale.

CDL and Alpha Investment Partners in S$1.1 billion Singapore office venture

Real estate giant City Developments (CityDev) will inject three of its office properties into an investment platform, in a move that will free up hundreds of millions of dollars in funds for new investments.

In a statement on Tuesday (Dec 15), CityDev said the three properties are Central Mall (Office Tower), 7 & 9 Tampines Grande and Manulife Centre.

The properties – valued at around S$1.1 billion – will be sold to a joint office investment platform co-owned by CityDev and Alpha Asia Macro Trends Fund II (AAMTF II), which is managed by Keppel’s Alpha Investment Partners.

CityDev Executive Chairman Kwek Leng Beng said: “Over the past two years, we have been advancing our two-pronged diversification strategy of developing new overseas and investment platforms. By building on the success of our first PPS transaction last year, this new initiative allows us to recycle capital for our growth plans.”

CityDev Chief Executive Officer Grant Kelley said: “Fundamentally the intent with the use of proceeds is to recycle capital for our growth plans both domestic and international. Last week we announced the closing of our first Australian investment in several years. In addition to that in the past month we’ve closed two major deals to the west of London.”

“We’ve been fairly clear in our investment objectives which are to find quality assets in five key markets, Australia, China, Japan, the UK and US, which makes sense for our shareholders on a risk adjusted basis,” he added.

PPS is an acronym for Profit Participation Securities, a sort of investment structure that allows a firm to sell future earnings from its properties while retaining control.

According to CityDev, the total aggregated value of the securities issued in the PPS transaction is S$333.5 million, comprising S$133.3 million of securities subscribed by a wholly-owned subsidiary of CityDev and a contribution of S$200.2 million by AAMTF II.

DBS and Oversea-Chinese Banking Corporation (OCBC) will provide S$750.1 million in senior loan facilities.

CityDev did not say how much new funding it will raise from this transaction. It will, however, continue to manage the three office properties, which currently have a strong occupancy of 98 per cent.

The PPS announced by CityDev on Tuesday is the firm’s second. Last year, it partnered with Blackstone’s Tactical Opportunities Fund and CIMB Bank for a S$1.5 billion PPS that invests in the cash flows of its upscale properties in Sentosa Cove, called the Quayside Collection.

Alpha Investment Partners, NTUC Income to acquire Capital Square

Alpha Investment Partners Limited (AIP) – which is the property fund management arm of Keppel Land – and NTUC Income have agreed to jointly acquire Capital Square for S$889 million.

Under the deal, Alpha Investment Partners will buy over a 50 per cent stake through its Macro Trends Fund. NTUC Income will hold the other 50 per cent.

Alpha Investment Partners will be the asset manager upon completion of the acquisition.

The two partners said they plan to further enhance Capital Square through various asset enhancement initiatives.

Capital Square is a 16-storey Grade A office tower located within Singapore’s central business district.

It was developed by Keppel Land, but the developer sold off the property in 2002, as part of its divestment plans then.

NTUC Income has been investing in Singapore’s real estate market to generate returns for policyholders.

Just recently, the insurer paid S$101 million for a 49 per cent stake in a prime office property at Collyer Quay.

Source : Channel NewsAsia – 20 Mar 2011