Tag Archives: business

Keppel Land buys stake in 112 Katong mall for S$51.4m

Keppel Land has acquired a 22.4 per cent stake in 112 Katong mall from BHG, Imagine Properties and Perennial Singapore Investment for S$51.4 million, Keppel Corp announced in a press release on Sunday (Jan 17).

The remaining 77.6 per cent stake is held by Alpha Asia Macro Trends Fund, which is managed by Alpha Investment Partners, a property fund management vehicle of Keppel Land.

Keppel Corp said the transaction is not expected to have any material impact on its net tangible assets or earnings per share for the current financial year.

CEO of Keppel Land Ang Wee Gee said the property management company will focus on strengthening 112 Katong’s positioning as a lifestyle and dining destination in the East.

Keppel Land Retail Management will be appointed as the retail manager for the mall, he added.

Separately, Keppel Corp also announced on Sunday that Keppel REIT has sold its 100 per cent stake in 77 King Street in Sydney, Australia, to a subsidiary of Invesco Asia Core Fund for S$160 million (S$160 million).

The sale price is about 40 per cent above Keppel REIT’s original purchase price of A$116 million in end-2010, and 27 per cent higher than the property’s latest valuation of A$126 million, Keppel Corp said.

Source : Channel NewsAsia – 17 Jan 2016

CapitaLand ends discussions to buy Asia Square Tower 1

CapitaLand, South-east Asia’s biggest developer, says it has withdrawn from negotiations to buy Asia Square Tower 1.

The company will continue to explore opportunities that allow it to generate required returns, it said in a statement today (Nov 4). CapitaLand didn’t give a reason for its decision.

A consortium of Norway’s sovereign wealth fund and CapitaLand was chosen as the preferred bidder for the tower being sold by BlackRock Inc, in what may become the biggest office deal in Singapore, people with knowledge of the matter said last month.

The 43-storey tower, located in the new financial district at Marina Bay, could be valued at more than S$3.5 billion, the people said last month. BlackRock, the world’s largest asset manager, said earlier this year that it had received expressions of interest for Asia Square Tower 1 and could get more than S$4 billion for the building, whose tenants include Citigroup.

CapitaLand’s third-quarter profit jumped 48 per cent to S$192.7 million as revenue rose 17 per cent to S$1.08 billion, the company said today. Residential sales in China more than doubled in the quarter from a year earlier. The developer said property cooling measures in Singapore will continue to weigh on its home market.

Singapore home prices have dropped for eight straight quarters, matching the longest losing streak in 13 years, as tighter mortgage lending sapped demand in Asia’s second-most expensive luxury housing market. The Government began introducing residential property curbs in 2009 as low interest rates and demand from foreign buyers raised concerns that the market was overheating.

Source : Today – 4 Nov 2015

CapitaLand Mall Trust to buy Bedok Mall for S$780m

CapitaLand Mall Trust (CMT), Singapore’s largest shopping mall trust, will buy Bedok Mall from sponsor CapitaLand in a deal that values the mall at S$780 million.

The 222,500 square foot Bedok Mall, which opened in December 2013, is part of an integrated retail-residential-transport development at Bedok Town Centre that includes the 583-unit condominium Bedok Residences developed by CapitaLand.

The mall’s Basement 2 is directly linked to the Bedok MRT station, while the new air-conditioned Bedok bus interchange is integrated with the mall on Level 2. Bedok Mall’s key tenants include Fairprice Finest, UNIQLO and Best Denki.

“The proposed acquisition of Bedok Mall complements CMT’s current portfolio of mainly suburban malls catering to the necessity shopping segment,” Mr Wilson Tan, CEO of CapitaLand Mall Trust Management, said in a statement.

“It will increase CMT’s asset size from S$10.2 billion as at 31 March 2015 to about S$11 billion,” he added.

CMT’s properties include Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura, Bugis Junction, Sembawang Shopping Centre, JCube, Clarke Quay and Raffles City Singapore, in which it has a 40 per cent interest.

CapitaLand Mall Trust Management is an indirect wholly-owned subsidiary of CapitaLand.

Source : Channel NewsAsia – 14 Jul 2015

OUE C-REIT to buy into One Raffles Place

OUE Commercial REIT on Wednesday (Jun 10) announced its plans to buy into One Raffles Place, in its maiden acquisition since its initial public offering in January last year.

Under the deal, OUE Commercial REIT plans to buy a stake of between 75 per cent and 83.33 per cent in OUB Centre Limited, which owns One Raffles Place. OUB is the registered owner of the property and it owns 81.54 per cent of the beneficial interest in the property.

This will give the REIT an effective interest of between 61.16 per cent and 67.95 per cent in One Raffles Place.

The agreed value for the acquisition is expected to be between S$1.28 billion and S$1.43 billion. Depending on the stake acquired, the purchase consideration is expected to be between S$1.0 billion and S$1.15 billion.

OUE C-REIT is seeking to strengthen its position within the Singapore office market. Following the deal, its assets under management is expected to increase from S$1.6 billion as at Dec 31, 2014, to S$3.4 billion.

Located in the heart of Singapore’s Central Business District, One Raffles Place is an integrated commercial development comprising two Grade-A office buildings and a recently refurbished retail mall – One Raffles Place Shopping Mall.

Source : Channel NewsAsia – 10 Jun 2015

Enough retail, industrial space for businesses to grow: DPM Teo

The Republic has taken significant steps to remain competitive and companies that want to expand here will have sufficient space to grow, Deputy Prime Minister Teo Chee Hean said on Friday (June 20).

Speaking at a luncheon that followed the annual general meeting of the Singapore International Chamber of Commerce, Mr Teo said the Government hopes to see more companies use Singapore as a base to seize growth opportunities in Asia.

“The new industrial and retail space coming on-stream in the next three years provides new supply that is double the average demand over the past three years. This strong upcoming supply of industrial and retail space will give businesses more options and ample space to expand their operations in Singapore,” he said.

Mr Teo also said that by end-2016, prime office space in core business areas should have increased by about 13 per cent from current levels. Price and rentals of private residential properties have levelled off since the last quarter of 2013, he added.

Source : Channel NewsAsia – 20 Jun 2014

Frasers Centrepoint Trust to buy Changi City Point for S$305m

Changi City Point at Changi Business Park looks set to become the next shopping mall to be acquired by a real estate investment trust.

Frasers Centrepoint Trust (FCT) said on Tuesday it has entered into a conditional sale and purchase agreement to buy Changi City Point from Ascendas Frasers Pte Ltd
for S$305 million.

Ascendas Frasers is a 50-50 joint venture between Ascendas Development and Frasers Centrepoint Ltd, which is FCT’s sponsor.

Changi City Point — a three-storey mall with one basement level — is known for its various factory outlets.

It is located near the Singapore Expo convention and exhibition centre and the Singapore Expo MRT station.

Source : Channel NewsAsia – 8 Apr 2014

Keppel REIT seeks buyers for Prudential Tower: Sources

Keppel REIT, the second-biggest office property trust in Asia excluding Japan, is seeking buyers for its 30-storey Prudential Tower in Singapore’s financial district, Bloomberg News reported on Monday, citing two people familiar with the matter.

Keppel REIT owns a 92.8 per cent stake in the tower, which was valued at S$490 million as of Dec 31 by independent valuers, according to the company’s filing on Jan 20. The property is fully occupied, that report showed.

Keppel REIT is seeking S$2,400 a square foot for Prudential Tower, one of the sources said, declining to be identified as the information is private. The price would value the trust’s stake at S$531 million, based on the 221,241 square feet of space it owns in the building.

“Keppel REIT does from time to time receive interest to acquire our properties,” it said in an e-mailed response to Bloomberg News queries. “We will consider all potential divestments and acquisitions, and will make an announcement if and when any such deals materialize.”

The Singapore-based real estate investment trust is looking to sell older assets to help fund acquisitions, Chief Executive Ng Hsueh Ling told reporters on Jan 20. The REIT may approach Keppel Land, its biggest shareholder, to buy the developer’s stake in the city’s Marina Bay Financial Centre Tower 3, she said.

Source : Today – 27 Jan 2014

CapitaLand, CapitaMalls Asia, CapitaMall Trust sign option to sell Westgate Tower

CapitaLand, CapitaMalls Asia and CapitaMall Trust have signed an option to sell Westgate Tower for S$579.4 million.

In a filing with the Singapore Exchange, CapitaLand said the option was granted to a consortium comprising Sun Venture Homes and Low Keng Huat (Singapore), which has up to January 24 to exercise it.

Located at Jurong Gateway, Westgate Tower is the office component of the Westgate integrated development which also includes a shopping mall.

The 20-storey prime office tower has a net saleable area of 304,963 square feet, and is targeted to be completed in late 2014.

Source : Channel NewsAsia – 3 Jan 2014

Retailers say Reits are pushing up rental costs

Real estate investment trusts (Reits) have become an investment darling in Singapore giving investors attractive returns.

But for retailers, Reits are causing them to cough out more in rents.

This is because Reits act mainly to boost returns for their shareholders.

President of the Singapore Retailers Association (SRA), Jannie Chan, says the higher rentals are adding to the woes in the retail sector which include a labour crunch and shortage of parking space.

Ms Chan says: “We’ve got the Reits killing us, we’ve got the labour killing us, and we’ve got no shopping (centre) car parks, so where are we going? So I think this is really (the result) of the government policies.”

In Singapore, up to 75 percent of a retailer’s costs are fixed costs such as rents and wages.

And over the years, the Singapore Retailers Association says rents, as a proportion of fixed costs, have risen relative to wages.

SRA says mall landlords like Reit managers raise rents by 5 to 10 percent every three years.

Ms Chan says: “(The make up of ) the fixed costs for retailers have shifted from 50 percent rental and 50 percent staff costs to 50 percent rental and 25 percent staff costs. The leases are short-term – it’s renewed every three years. Each time there is a renewal, (the retailer or tenant) has to pay between 5 and 10 percent more.”

She adds: “If your business is surviving, or doing well, you could afford that raise. But if not, you would then have to move, which means that the investments you have made over the last three years – the renovation, the staff – you may have to pull out. That becomes quite damaging, especially when you have been there for a long time and (is) there for the long haul within the shopping centre. So I think the Reits should be more mindful. If you have clients that over a period have been supportive of you, but during a certain period when there’s a downturn in the economy, they could make adjustments and be more reasonable and more compassionate.”

Speaking at the World Retail Congress, a retail industry event, which was attended by over 500 retail professionals, Ms Chan suggests that Reits could moderate their shareholders’ expectations of yields.

And this can then translate to more reasonable increases in rents.

She says: “Perhaps there could be a policy to set the Reit off between 4 and 5 percent, instead of 7 to 8 percent. At the end of the day, it’s what sort of returns (being delivered) to the investor. And at a time like this, when you’ve got very low interest rates, that seems to be compatible and reasonable.”

Other industry experts say the problems that Singapore retailers face are not unique.

Ian Mcgarrigle, Chairman, World Retail Congress, says: “For Singapore retailers, the key issue seems to be the high fixed costs that they have to operate with – the rent that they are paying for space and the high cost of labour, and also the increasing scarcity of labour. They’re not issues that surprise me – we hear them to greater or lesser degree around the world.”

CapitaMall Trust (CMT) is one of the biggest mall landlords in Singapore.

A spokesperson from CapitaMall Trust Management says it is an industry norm to have rental reversions every three years, regardless of a Reit or non-Reit regime.

Some experts believe higher rents are justified as these Reit managers upgrade mall properties to improve its business mix and customer flow.

In the 2012 financial year, CMT revealed that it raised rents across its portfolio of malls by an average of 6 percent from preceding rental rates, typically committed three years ago.

“At an average of 2 percent a year, the change in rental is lower than inflation in Singapore,” said the CapitaMall Trust Management Limited spokesperson.

The current inflation rate is around 4 percent.

The spokesperson added that the trust manager’s approach is to partner its retailers to drive shopper traffic to their malls and increase their sales.

“For example, last year, we held 13 Biz+ seminars, workshops and classes in areas such as customer relationship management and visual merchandising. These initiatives help retailers to increase business in our malls,” said the spokesperson.

Another major Reit manager, Frasers Centrepoint Trust management, was not available for comment.

Source : Channel NewsAsia – 20 Mar 2013

Retail rents in S’pore up 2% in 2012

Prices of shop space rose 2.0 per cent in 2012, while rentals dropped marginally by 0.3 per cent according to the latest statistics from the Urban Redevelopment Authority (URA).

Yields of retail units have dropped last year, but most market experts Channel NewsAsia spoke to are optimistic about the demand for retail space in Singapore from both investors and retailers.

After just one week, some retail units at the newly-launched mixed commercial development Alexandra Central are reportedly put on the market again.

Such speculation raises the possibility of cooling measures being extended to the commercial property sector where prices of strata-titled retail units have jumped by some 56 per cent over the last two years while median rentals have gone up by up to 35 per cent, according to Savills Singapore.

Alan Cheong, research head at Savills Singapore, said: “Rentals are not keeping up with price increases, meaning there will be yield compression. We also noticed that strata title units sold was about 1,274 square feet (in 2010). Last year, it was only 430 square feet. There is shrinkage in the average size of retail units.”

A smaller strata-titled unit could reduce the capital outlay for investors despite prices on a per square foot basis getting more expensive.

But market experts note that vacancy rates at 5.2 per cent in the fourth quarter of 2012 is at a 15-year low.

Unlike residential private property where an oversupply may be expected in the next few years, analysts believe demand for retail space is still strong.

Ku Swee Yong, CEO of International Property Advisor, said: “The future supply coming on stream will be spaced out for the next four to five years. And a large number of is concentrated in Jurong East where there will be creation of several thousand new jobs in two hospitals.”

Prime rents like those on Orchard Road are expected to stay resilient. In the worst case scenario, analysts expect a mild correction of up to three per cent. This is because of the strengthening Sing dollar and a slower Singapore economy in 2013.

Analysts said URA data on shop space rentals are derived from a wide variety of commercial properties like strata-titled units, and those belonging to real estate investment trusts or REITS.

A decline in the rental index in shop space could be due to a higher number of leases from those in the heartlands, which are typically lower than those from the Orchard Road belt.

Source : Channel NewsAsia – 28 Jan 2013