MAPLETREE Logistics Trust has signed a binding memorandum of understanding (MOU) with Kabushiki Kaisha A-Max to acquire three properties in Japan, its manager Mapletree Logistics Trust Management (MLTM) said yesterday.
The properties are the Iwatsuki Logistics Centre, a distribution centre and office in Iwatsuki, with a gross floor area (GFA) of 30,000 sq m; the Iruma Logistics Centre, a distribution centre and office in Iruma, with GFA of 26,000 sq m, and Noda Logistics Centre, a distribution centre and office in Noda, with GFA of 36,000 sq m. All the locations are in Saitama Prefecture, which is Toyko's northern neighbour.
The properties will be acquired for a total of 13 billion yen, (about S$200 million). The vendor, A-Max, is a logistics facilities development and management company.
The acquisition is the sixth announced by Mapletree since December last year, totalling $430 million.
With the completion of all of these acquisitions, MapletreeLog will have a portfolio value of about $3.3 billion.
MLTM said the latest acquisition will have significant benefits arising from attractive net property income (NPI) yield and distribution per unit accretion. The properties are also 100 per cent leased for eight to 10 years, providing stable rental income, and are in good locations.
'Given the low interest rates in Japan, it is likely that this acquisition will be funded predominantly by debt,' said MLTM. 'Any proceeds from equity issuance will likely be applied towards other acquisitions or refinancing of other more expensive debt in the portfolio to maintain a gearing below 45 per cent.'
MLTM chief executive Richard Lai said: 'Japan's logistics market remains attractive to us because it has breadth and depth that is currently unmatched elsewhere in Asia. We will continue to expand our portfolio in Japan by selectively acquiring yield-accretive logistics assets of good quality and location. We also seek to enhance the quality of our income stream through addition of good-quality customers to our diversified customer base. We will continue to focus on such accretive third-party acquisitions as a key strategy to grow our portfolio, and in turn, the returns to our unit-holders.'
Source: Business Times, 29 Jul 2010
Thursday, July 29, 2010
CapitaMalls Asia has up to $3b to develop, buy malls
It is setting its sights on growth markets of Singapore, China and Malaysia: CEO
CAPITAMALLS Asia (CMA) has a potential war chest of some $2.5-3 billion for developing and buying malls, and it will be targeting its firepower at Singapore, China and Malaysia.
The retail property group's shares may have been hovering below the initial public offering price, but they should perform better in the longer term.
CMA chief executive Lim Beng Chee shared these views in an interview with the press yesterday. The group is sitting on around $1 billion of cash, which includes proceeds from the listing of CapitaMalls Malaysia Trust (CMMT) and the sale of Clarke Quay to CapitaMall Trust.
With that, the group can borrow another $1.5-2 billion for investments. This situation presents a 'very good opportunity' for acquisitions, he said.
In Singapore, the market has improved from a year ago, Mr Lim said. The economy has picked up, retail sales have grown, and tourist arrivals have increased.
CMA is eyeing state land for mall developments, and it is particularly keen on areas where it already has a presence. These would include the Jurong district, where IMM and the upcoming JCube are.
The group had bid for a mixed-use site in the Jurong Lake district in June, but lost out to Australian developer Lend Lease. 'It's ok, there are always sites two and three' in that area, Mr Lim said.
Another plot of interest is the one at Stamford Road/North Bridge Road, where Capitol Theatre is. The tender for the site will close next month and the winning developer can build an underground link to City Hall MRT station. Raffles City Singapore, which CMA has a stake in, is right next to the station.
Asked if CMA will be bidding for that land parcel, Mr Lim said: 'We'll consider any site.'
There have been concerns about an oversupply of retail space in Singapore but Mr Lim believes in just the opposite. 'My problem is, I've got no space.'
According to him, many global retail brands such as Abercrombie & Fitch are not here because they have a problem finding space for large flagship stores.
Besides Singapore, China remains a key growth market for CMA. The Chinese government is trying to boost domestic consumption for economic growth and CMA can benefit from that trend, Mr Lim said.
In Malaysia, CMA is also looking to acquire or develop malls. It is setting up a RM1 billion (S$428 million) fund for this.
Despite the many growth plans, investors appear unexcited. CMA's shares have been trading below their listing price of $2.12 in the last one month. The counter closed unchanged at $2.05 yesterday.
'I think a lot of shareholders don't understand this business,' Mr Lim said, explaining that CMA runs longer term operations of building and managing malls.
On the gap between the share price and the listing price he said: 'My sense is, we can actually overcome this very easily.
'It's a question of us making a few acquisitions over time that could actually correct the share price... I have no doubt that over time it will correct.'
Source: Business Times, 29 Jul 2010
CAPITAMALLS Asia (CMA) has a potential war chest of some $2.5-3 billion for developing and buying malls, and it will be targeting its firepower at Singapore, China and Malaysia.
The retail property group's shares may have been hovering below the initial public offering price, but they should perform better in the longer term.
CMA chief executive Lim Beng Chee shared these views in an interview with the press yesterday. The group is sitting on around $1 billion of cash, which includes proceeds from the listing of CapitaMalls Malaysia Trust (CMMT) and the sale of Clarke Quay to CapitaMall Trust.
With that, the group can borrow another $1.5-2 billion for investments. This situation presents a 'very good opportunity' for acquisitions, he said.
In Singapore, the market has improved from a year ago, Mr Lim said. The economy has picked up, retail sales have grown, and tourist arrivals have increased.
CMA is eyeing state land for mall developments, and it is particularly keen on areas where it already has a presence. These would include the Jurong district, where IMM and the upcoming JCube are.
The group had bid for a mixed-use site in the Jurong Lake district in June, but lost out to Australian developer Lend Lease. 'It's ok, there are always sites two and three' in that area, Mr Lim said.
Another plot of interest is the one at Stamford Road/North Bridge Road, where Capitol Theatre is. The tender for the site will close next month and the winning developer can build an underground link to City Hall MRT station. Raffles City Singapore, which CMA has a stake in, is right next to the station.
Asked if CMA will be bidding for that land parcel, Mr Lim said: 'We'll consider any site.'
There have been concerns about an oversupply of retail space in Singapore but Mr Lim believes in just the opposite. 'My problem is, I've got no space.'
According to him, many global retail brands such as Abercrombie & Fitch are not here because they have a problem finding space for large flagship stores.
Besides Singapore, China remains a key growth market for CMA. The Chinese government is trying to boost domestic consumption for economic growth and CMA can benefit from that trend, Mr Lim said.
In Malaysia, CMA is also looking to acquire or develop malls. It is setting up a RM1 billion (S$428 million) fund for this.
Despite the many growth plans, investors appear unexcited. CMA's shares have been trading below their listing price of $2.12 in the last one month. The counter closed unchanged at $2.05 yesterday.
'I think a lot of shareholders don't understand this business,' Mr Lim said, explaining that CMA runs longer term operations of building and managing malls.
On the gap between the share price and the listing price he said: 'My sense is, we can actually overcome this very easily.
'It's a question of us making a few acquisitions over time that could actually correct the share price... I have no doubt that over time it will correct.'
Source: Business Times, 29 Jul 2010
NUS estimates confirm private home prices tapered off in June
(SINGAPORE) Latest flash estimates from National University of Singapore (NUS) confirm what property industry players have already experienced on the ground - a rapid slowdown in the growth of non-landed private home prices in June compared with May.
NUS's overall price index for non-landed homes for June rose 0.3 per cent month on month, compared with month-on-month gains of 2.4 per cent each for May and April.
It was the same story for the sub-index for the Central region, which covers a basket of properties in districts 1-4 and 9-11. It increased 0.7 per cent month on month in June, slower than gains of 2.1 per cent in May and 3.4 per cent in April.
The sub-index for Non-Central region was unchanged in June from the preceding month, after rises of 2.7 per cent in May and 1.7 per cent in April.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
DTZ executive director (consulting) Ong Choon Fah said: 'The latest indices confirm the slowdown in buying momentum felt on the ground in June - because of the school holidays, World Cup and continued uncertainty in the eurozone economies.
'People found no reason to rush and buy a home. Developers have also been holding back launches and the projects they did launch were not priced at the top end of their own target range; so developers have also moderated their own price expectation.'
Since the end of last year, all three NUS indices have appreciated - to the tune of 8.7 per cent for the overall index, 8.2 per cent for Central region and 9.2 per cent for Non-Central region. Based on the latest June flash estimates, NUS's overall SRPI is now 36.3 per cent above the post-financial crisis low in March 2009. Over the same period, the growth for the Central region has been 42.1 per cent and that for the Non-Central region, about 33.3 per cent.
The June flash estimate for Central region is still 3.5 per cent below the pre-crisis high in November 2007. However, for the Non-Central region, the latest index surpassed its respective pre-crisis peak in January 2008 by 11.2 per cent. As a result, the overall SRPI flash estimate for June is 5.7 above its November 2007 high.
Looking ahead, Mrs Ong reckoned the overall and Central region indices are likely to remain flat in July, but the index for the Non-Central region could either be flat or post a marginal increase, supported by high cash-over-valuations in the HDB resale market.
Meanwhile Hong Leong Holdings said yesterday it has sold over 75 per cent of the 468 units available at The Scala, a 99-year condo at Serangoon Avenue 3. The units are sized between 474 and 2,142 sq ft, and sold at an average of $1,150 per square foot. Buyers comprised a good mix of HDB upgraders and investors, with the majority made up of locals.
Source: Business Times, 29 Jul 2010
NUS's overall price index for non-landed homes for June rose 0.3 per cent month on month, compared with month-on-month gains of 2.4 per cent each for May and April.
It was the same story for the sub-index for the Central region, which covers a basket of properties in districts 1-4 and 9-11. It increased 0.7 per cent month on month in June, slower than gains of 2.1 per cent in May and 3.4 per cent in April.
The sub-index for Non-Central region was unchanged in June from the preceding month, after rises of 2.7 per cent in May and 1.7 per cent in April.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
DTZ executive director (consulting) Ong Choon Fah said: 'The latest indices confirm the slowdown in buying momentum felt on the ground in June - because of the school holidays, World Cup and continued uncertainty in the eurozone economies.
'People found no reason to rush and buy a home. Developers have also been holding back launches and the projects they did launch were not priced at the top end of their own target range; so developers have also moderated their own price expectation.'
Since the end of last year, all three NUS indices have appreciated - to the tune of 8.7 per cent for the overall index, 8.2 per cent for Central region and 9.2 per cent for Non-Central region. Based on the latest June flash estimates, NUS's overall SRPI is now 36.3 per cent above the post-financial crisis low in March 2009. Over the same period, the growth for the Central region has been 42.1 per cent and that for the Non-Central region, about 33.3 per cent.
The June flash estimate for Central region is still 3.5 per cent below the pre-crisis high in November 2007. However, for the Non-Central region, the latest index surpassed its respective pre-crisis peak in January 2008 by 11.2 per cent. As a result, the overall SRPI flash estimate for June is 5.7 above its November 2007 high.
Looking ahead, Mrs Ong reckoned the overall and Central region indices are likely to remain flat in July, but the index for the Non-Central region could either be flat or post a marginal increase, supported by high cash-over-valuations in the HDB resale market.
Meanwhile Hong Leong Holdings said yesterday it has sold over 75 per cent of the 468 units available at The Scala, a 99-year condo at Serangoon Avenue 3. The units are sized between 474 and 2,142 sq ft, and sold at an average of $1,150 per square foot. Buyers comprised a good mix of HDB upgraders and investors, with the majority made up of locals.
Source: Business Times, 29 Jul 2010
Real estate gets a new gauge of market pulse
New industry-backed index to measure sentiment shows mood has sobered slightly
(SINGAPORE) In a historic move, the Real Estate Developers' Association of Singapore has teamed up with the National University of Singapore's Department of Real Estate (DRE) to develop a Real Estate Sentiment Index (RESI), and it shows a lower reading for the second quarter of this year than for the first quarter.
Developers and industry players continue to express positive sentiments but expect market conditions to be less robust, Redas and DRE said.
More respondents were still positive (rather than negative) on the overall performance of the prime and suburban private residential markets over the next six months but the consensus as indicated by net balances weakened in the second quarter compared with the first quarter.
On the other hand, the net balance for offices improved substantially, in tandem with improving sentiment in this segment in April-June.
The survey also found that 51 per cent of developers polled for Q2 expect price growth for new residential launches, down from 85 per cent in Q1.
About 68 per cent of developers surveyed in Q2 expect more units to be launched over the next six months, down from 83 per cent in the Jan-March period.
The findings of the survey will be officially released this morning at the Redas Property Prospects Update 2010 seminar at Orchard Hotel.
Some market watchers welcomed Redas efforts in coming up with an objective method of gauging the confidence level of senior executives of property developers - and making it public. 'It's good to hear from the horse's mouth,' said DTZ executive director Ong Choon Fah.
Redas CEO Steven Choo noted that 'while business expectation surveys are available for the manufacturing and service industries, there is currently no indicator specifically tracking sentiment in the fast-paced real estate market of Singapore'.
Some industry watchers also pointed to the refreshing change at Redas. 'Previously, something like this, showing a slowdown in sentiment, would have been considered extremely sensitive and developers may have tried to hide it. Now they're more open about it,' said an observer.
Mrs Ong said: 'Releasing the RESI shows just how far Redas has come. It reflects the maturity of the property market and stakeholders. It's important to give the true market signals to all stakeholders - including home buyers and government - if we're going to have a sustainable property market based on sound fundamentals.'
Redas and DRE developed the quarterly structured-questionnaire survey, which is conducted among senior executives of Redas member firms - mostly developers but also property consultants, architects, quantity surveyors and other professionals.
Dr Choo, who assumed the post of Redas CEO nearly a year ago, says: 'The partnership between NUS and Redas has ensured academic rigour and added credibility to the new index. We are confident that in time, RESI will become an authoritative index and a highly-valued forward indicator for the property market, as well as an invaluable tool to guide the market and industry players, including investors and policymakers.'
Redas received about 70 responses for each of the Q1 and Q2 surveys - from largely the same people.
The survey measures respondents' perceptions of current market conditions/ performance (now, compared with six months ago) and future expectations (over the next six months).
The RESI comprises three indices. The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 7.2 in Q1 to 5.8 in Q2. The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 6.4 to 5.9.
As a result, the Composite Sentiment Index, which is the average of the two indices, declined from 6.8 in Q1 to 5.9 in Q2.
The index ranges from 0 to 10, with a score below 5 indicating deteriorating market conditions. A score above 5 shows improving market conditions. The Q2 score shows that developers and industry players continue to express positive sentiments and expect market conditions to remain favourable, but less robust than before.
Source: Business Times, 29 Jul 2010
(SINGAPORE) In a historic move, the Real Estate Developers' Association of Singapore has teamed up with the National University of Singapore's Department of Real Estate (DRE) to develop a Real Estate Sentiment Index (RESI), and it shows a lower reading for the second quarter of this year than for the first quarter.
Developers and industry players continue to express positive sentiments but expect market conditions to be less robust, Redas and DRE said.
More respondents were still positive (rather than negative) on the overall performance of the prime and suburban private residential markets over the next six months but the consensus as indicated by net balances weakened in the second quarter compared with the first quarter.
On the other hand, the net balance for offices improved substantially, in tandem with improving sentiment in this segment in April-June.
The survey also found that 51 per cent of developers polled for Q2 expect price growth for new residential launches, down from 85 per cent in Q1.
About 68 per cent of developers surveyed in Q2 expect more units to be launched over the next six months, down from 83 per cent in the Jan-March period.
The findings of the survey will be officially released this morning at the Redas Property Prospects Update 2010 seminar at Orchard Hotel.
Some market watchers welcomed Redas efforts in coming up with an objective method of gauging the confidence level of senior executives of property developers - and making it public. 'It's good to hear from the horse's mouth,' said DTZ executive director Ong Choon Fah.
Redas CEO Steven Choo noted that 'while business expectation surveys are available for the manufacturing and service industries, there is currently no indicator specifically tracking sentiment in the fast-paced real estate market of Singapore'.
Some industry watchers also pointed to the refreshing change at Redas. 'Previously, something like this, showing a slowdown in sentiment, would have been considered extremely sensitive and developers may have tried to hide it. Now they're more open about it,' said an observer.
Mrs Ong said: 'Releasing the RESI shows just how far Redas has come. It reflects the maturity of the property market and stakeholders. It's important to give the true market signals to all stakeholders - including home buyers and government - if we're going to have a sustainable property market based on sound fundamentals.'
Redas and DRE developed the quarterly structured-questionnaire survey, which is conducted among senior executives of Redas member firms - mostly developers but also property consultants, architects, quantity surveyors and other professionals.
Dr Choo, who assumed the post of Redas CEO nearly a year ago, says: 'The partnership between NUS and Redas has ensured academic rigour and added credibility to the new index. We are confident that in time, RESI will become an authoritative index and a highly-valued forward indicator for the property market, as well as an invaluable tool to guide the market and industry players, including investors and policymakers.'
Redas received about 70 responses for each of the Q1 and Q2 surveys - from largely the same people.
The survey measures respondents' perceptions of current market conditions/ performance (now, compared with six months ago) and future expectations (over the next six months).
The RESI comprises three indices. The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 7.2 in Q1 to 5.8 in Q2. The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 6.4 to 5.9.
As a result, the Composite Sentiment Index, which is the average of the two indices, declined from 6.8 in Q1 to 5.9 in Q2.
The index ranges from 0 to 10, with a score below 5 indicating deteriorating market conditions. A score above 5 shows improving market conditions. The Q2 score shows that developers and industry players continue to express positive sentiments and expect market conditions to remain favourable, but less robust than before.
Source: Business Times, 29 Jul 2010
Wednesday, July 28, 2010
Real estate agencies step up efforts to woo Chinese investors
Some Singapore real estate agencies are wooing Chinese investors to buy properties here.
They are doing so by having a representative office in China and networking with private bankers to reach prospective buyers.
These initiatives have benefited HSR International Realtors and ECG Property.
It is not just about the property for most Chinese investors, it is the lifestyle.
Property agencies said that six-in-10 prospective Chinese customers are asking about Sentosa Cove, seen as prestigious waterfront living.
HSR said foreign buyers now account for about 40 per cent of its sales in prime districts.
To further tap the market, it now has a representative office in the second-tier city of Wuhan in China.
HSR hosts trips for a group of eight to 10 wealthy Chinese investors to Singapore once every two months.
Jeffery Hong, executive director, Agency, HSR International Realtors, said: “We target to do slightly more in the forth quarter of this year and the first quarter of next year. We may have exhibitions and roadshows; we may even bring prestigious local projects all the way to China to do a launch over there.”
Meanwhile, ECG Property has set up a team to link up with wealth managers to reach out to high net worth individuals in China.
Daryl Ou, executive director, ECG Property, said: “Either we will fly over there or correspond through emails, after which we will just shortlist the properties they wanted; they will usually fly over to Singapore over the weekends, that is when we will bring them around to see the properties.”
ECG said sales of high-end homes rose 5 per cent in the first half of the year, at five to six units each month.
It hopes to set up an investment office, likely in Guangzhou.
Property agents said the demand for homes from Chinese investors will hold up. That is because the yuan appreciation has strengthen their buying power, and homes in Singapore are also more affordable compared to properties in other Asian cities.
Industry data has shown that the number of buyers from China inched up slightly in recent months.
Based on caveats lodged, 190 private homes were bought by the Chinese in the second quarter, 10 units more than the first quarter.
Overall, foreigners purchased 1,036 homes in the first three months of the year, compared with 1,004 units in the second quarter. The top three groups of buyers include the Indonesians, Malaysians and Chinese.
Source: Channel News Asia, 28 Jul 2010
They are doing so by having a representative office in China and networking with private bankers to reach prospective buyers.
These initiatives have benefited HSR International Realtors and ECG Property.
It is not just about the property for most Chinese investors, it is the lifestyle.
Property agencies said that six-in-10 prospective Chinese customers are asking about Sentosa Cove, seen as prestigious waterfront living.
HSR said foreign buyers now account for about 40 per cent of its sales in prime districts.
To further tap the market, it now has a representative office in the second-tier city of Wuhan in China.
HSR hosts trips for a group of eight to 10 wealthy Chinese investors to Singapore once every two months.
Jeffery Hong, executive director, Agency, HSR International Realtors, said: “We target to do slightly more in the forth quarter of this year and the first quarter of next year. We may have exhibitions and roadshows; we may even bring prestigious local projects all the way to China to do a launch over there.”
Meanwhile, ECG Property has set up a team to link up with wealth managers to reach out to high net worth individuals in China.
Daryl Ou, executive director, ECG Property, said: “Either we will fly over there or correspond through emails, after which we will just shortlist the properties they wanted; they will usually fly over to Singapore over the weekends, that is when we will bring them around to see the properties.”
ECG said sales of high-end homes rose 5 per cent in the first half of the year, at five to six units each month.
It hopes to set up an investment office, likely in Guangzhou.
Property agents said the demand for homes from Chinese investors will hold up. That is because the yuan appreciation has strengthen their buying power, and homes in Singapore are also more affordable compared to properties in other Asian cities.
Industry data has shown that the number of buyers from China inched up slightly in recent months.
Based on caveats lodged, 190 private homes were bought by the Chinese in the second quarter, 10 units more than the first quarter.
Overall, foreigners purchased 1,036 homes in the first three months of the year, compared with 1,004 units in the second quarter. The top three groups of buyers include the Indonesians, Malaysians and Chinese.
Source: Channel News Asia, 28 Jul 2010
Just two bids for one-north office site
A TENDER for a large high-rise commercial site in the 200ha innovation and research hub one-north has attracted just two bidders.
Ho Bee Developments put in the top bid of $410.99 million or $342.20 per sq ft per plot ratio (psf ppr).
That is about 7 per cent above the second highest bid of $384 million or $319.80 psf ppr from Mapletree Trustee.
Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, said its plan is to rent out the office units for recurring income, and it is looking at achieving office rents of $5 psf.
'We believe we can build an iconic building on this landmark site,' he said.
The 99-year leasehold site has been on the Government's reserve list of sites since April 2008. A tender was finally triggered in May when Mapletree committed to a minimum bid of $320 million, or $266 psf ppr, which the Government found acceptable.
The site of about 1.8ha is located at the junction of North Buona Vista Road and Commonwealth Avenue West and is near the Buona Vista MRT station. It has a
potential yield of 111,565 sq m, with 2,000 sq m being set aside for retail use.
JTC said the building will provide office space outside the Central Business District for the business support companies of the research institutes at one-north.
Cushman & Wakefield managing director Donald Han said the bids were within the expected range.
The low level of interest is due to the huge price sum involved, he added.
Also, 'as an office product, it is untested in the area, which is predominantly industrial in nature', he said.
CBRE Research said the development cost for a predominantly office tower is about $900 psf, based on the top bid.
Just under 1 million sq ft of net lettable area of commercial space could be developed on this parcel, said its executive director Li Hiaw Ho.
'This would facilitate the expansion of research and development functions at one-north and serve as an alternative source of office supply post-2013 in the Buona Vista sub-regional centre,' he said.
Mr Han said current rents in the area are about $3.80 psf to $4.50 psf.
As office rents have bottomed out in the second quarter, they are expected to rise in time. 'The rental yield would therefore be in excess of 5 per cent,' said Mr Han.
Source: Straits Times, 28 Jul 2010
Ho Bee Developments put in the top bid of $410.99 million or $342.20 per sq ft per plot ratio (psf ppr).
That is about 7 per cent above the second highest bid of $384 million or $319.80 psf ppr from Mapletree Trustee.
Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, said its plan is to rent out the office units for recurring income, and it is looking at achieving office rents of $5 psf.
'We believe we can build an iconic building on this landmark site,' he said.
The 99-year leasehold site has been on the Government's reserve list of sites since April 2008. A tender was finally triggered in May when Mapletree committed to a minimum bid of $320 million, or $266 psf ppr, which the Government found acceptable.
The site of about 1.8ha is located at the junction of North Buona Vista Road and Commonwealth Avenue West and is near the Buona Vista MRT station. It has a
potential yield of 111,565 sq m, with 2,000 sq m being set aside for retail use.
JTC said the building will provide office space outside the Central Business District for the business support companies of the research institutes at one-north.
Cushman & Wakefield managing director Donald Han said the bids were within the expected range.
The low level of interest is due to the huge price sum involved, he added.
Also, 'as an office product, it is untested in the area, which is predominantly industrial in nature', he said.
CBRE Research said the development cost for a predominantly office tower is about $900 psf, based on the top bid.
Just under 1 million sq ft of net lettable area of commercial space could be developed on this parcel, said its executive director Li Hiaw Ho.
'This would facilitate the expansion of research and development functions at one-north and serve as an alternative source of office supply post-2013 in the Buona Vista sub-regional centre,' he said.
Mr Han said current rents in the area are about $3.80 psf to $4.50 psf.
As office rents have bottomed out in the second quarter, they are expected to rise in time. 'The rental yield would therefore be in excess of 5 per cent,' said Mr Han.
Source: Straits Times, 28 Jul 2010
Ho Bee Investment puts in top bid for Buona Vista site
HO Bee Investment is planning to invest about $1 billion to develop a commercial project at North Buona Vista Drive.
The company told BT this after it submitted the top bid for a 99-year leasehold commercial plot located in the one-north research area yesterday.
The tender for the 1.8 hectare site attracted two bids. Ho Bee's was $410.99 million, which works out to $342 per sq ft per plot ration (psf ppr).
The second bid came from Mapletree Investments, at $384 million or $320 psf ppr.
The site has a maximum allowable gross floor area (GFA) of 1.2 million sq ft. Ho Bee hopes to set aside some 1-2 per cent of space in the commercial development for retail shops. It is also exploring the possibility of having service apartments within the development.
The site has a good size for creating 'a landmark building in a very attractive location', Ho Bee said. It plans to lease the development out for recurring income when it is ready in about four years' time.
Market watchers had expected demand for the site to be lukewarm given its large size, which would involve a huge capital commitment.
But the site has other attractions: it is near Buona Vista MRT Station and lies within a growing research cluster for the biomedical, infocommunication and media industries.
CB Richard Ellis Research executive director Li Hiaw Ho believes the site can yield a net lettable commercial area of just under a million sq ft. 'This would facilitate the expansion of R&D functions at one-north and serve as an alternative source of office supply post- 2013 in the Buona Vista sub-regional centre.'
Sentiment in the commercial property market has picked up of late. Official figures show that office rents increased 1.1 per cent in the second quarter from a quarter ago. Prices of office space climbed 4.6 per cent.
There was also a net increase of 398,264 sq ft in office space demand in the second quarter.
Source: Business Times, 28 Jul 2010
The company told BT this after it submitted the top bid for a 99-year leasehold commercial plot located in the one-north research area yesterday.
The tender for the 1.8 hectare site attracted two bids. Ho Bee's was $410.99 million, which works out to $342 per sq ft per plot ration (psf ppr).
The second bid came from Mapletree Investments, at $384 million or $320 psf ppr.
The site has a maximum allowable gross floor area (GFA) of 1.2 million sq ft. Ho Bee hopes to set aside some 1-2 per cent of space in the commercial development for retail shops. It is also exploring the possibility of having service apartments within the development.
The site has a good size for creating 'a landmark building in a very attractive location', Ho Bee said. It plans to lease the development out for recurring income when it is ready in about four years' time.
Market watchers had expected demand for the site to be lukewarm given its large size, which would involve a huge capital commitment.
But the site has other attractions: it is near Buona Vista MRT Station and lies within a growing research cluster for the biomedical, infocommunication and media industries.
CB Richard Ellis Research executive director Li Hiaw Ho believes the site can yield a net lettable commercial area of just under a million sq ft. 'This would facilitate the expansion of R&D functions at one-north and serve as an alternative source of office supply post- 2013 in the Buona Vista sub-regional centre.'
Sentiment in the commercial property market has picked up of late. Official figures show that office rents increased 1.1 per cent in the second quarter from a quarter ago. Prices of office space climbed 4.6 per cent.
There was also a net increase of 398,264 sq ft in office space demand in the second quarter.
Source: Business Times, 28 Jul 2010
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