Perennial selling huge stake in TripleOne

TripleOne Somerset is a prime integrated development comprising two premium-grade office towers and a retail podium next to Somerset MRT station. Perennial Real Estate Holdings (PREH) is leading a group of investors that are selling their combined 70 per cent stake in TripleOne Somerset to Hong Kong’s Shun Tak Holdings.

PREH and six other shareholders of Perennial Somerset Investors (PSI), their holding company for TripleOne Somerset, are offloading a combined 61 per cent stake in the property for $305 million. PREH, which originally held 50.2 per cent of PSI, is divesting a 20.2 per cent slice while retaining 30 per cent. It will collect about $101 million for the sale, making a pre-tax gain of about $34.3 million.

The other six shareholders, all of whom have fully divested their stakes in PSI, are SingHaiyi Group, Boustead Projects, BreadTalk Group, Shun Fung Holdings, ROOI Holdings and Grandma’s Holdings.

Unified Elite Limited, another existing shareholder of PSI and a connected person to Shun Tak, will sell its 9 per cent stake to Shun Tak. The sale price was based on an agreed total property price of about $1.258 billion, or $2,200 per sq ft. The divestments are expected to be completed by June 30.

Former Queenstown cinema site sold for $78M

A PRIME commercial-zoned piece of vacant land – where the former Queenstown cinema and bowling centre once stood – has been sold for S$78 million. The price for the site, which has a balance lease term of 57 years, is understood to work out to about S$756 per square foot of potential gross floor area.

The site is at the corner of Commonwealth Avenue and Margaret Drive, located a stone’s throw from Queenstown MRT Station. The site comprises two lots of land adding up to 32,305 sq ft. The Queenstown Public Library – which opened 46 years ago and was granted conservation status in 2013- still stands near the site.

Crescendas Group is selling the property to a company controlled by property developer and investor Cheong Sim Lam, a member of the family that developed International Plaza in Anson Road in the 1970s.

Crescendas was previously granted written permission to redevelop the site into a seven-storey commercial building but that approval has since lapsed and the new owner will have to make a fresh application for the site’s redevelopment. Under the Urban Redevelompment Authority’s Master Plan 2014, the site is zoned for commercial use.

Based on the land price of around S$756 per square foot per plot ratio, a new commercial development on the site could breakeven at about S$1,800-1,900 psf, say market watchers. The buyer, Mr Cheong, has been in the news in recent years for his property investments in the Central Business District. He bought two adjacent office buildings at 137 and 139 Cecil Street around 2009 but sold them in 2015 and 2014 respectively.

Along Marine Parade Central, he is developing a four-storey commercial building named IMall, on the former Republic Theatre site.

All HDB industrial properties to JTC by 2018

By the first quarter of 2018, all 10,700 industrial units and 540 land leases under the Housing & Development Board (HDB) will be consolidated under JTC, a single agency offering one-stop access to a full range of Singapore’s public-sector industrial facilities.

The properties will be transferred from HDB’s portfolio to JTC’s at net book value.

Minister for Trade and Industry Lim Hng Kiang said this will better support small and medium-sized enterprises (SMEs) in their business growth.

The government will be able to undertake more comprehensive master-planning of industrial estates across Singapore; the move will also facilitate more efficient clustering of complementary activities and integration of activities along the value chain.

JTC wants to bring HDB tenants under its fold to offer them the same support that JTC tenants under the parentage of the Ministry of Trade and Industry enjoy, and to enhance their productivity and transform them into more competitive enterprises. (HDB falls under the Ministry of National Development.

One common problem HDB industrial tenants face lies in finding adjacent space into which to expand; many end up taking space in multiple venues, sometimes across the island. What JTC can offer SMEs is contiguous large floor plates in its own facilities.

It can also help SMEs plan ahead, by charting their growth trajectories and anticipating their future needs. JTC can provide, not just bigger spaces, but also land for expansion.

Guoxin Manufacturing is one example of an HDB tenant that is moving into a 1,180 sq m space at JTC Space @ Tampines North; this is twice the amount of space it used to occupy over five different units in Tuas and Ubi.

All HDB tenants and lessees affected by the consolidation will continue to be served by the same team of 160 HDB officers, who will be transferred to JTC. JTC also gave the assurance that the contracted terms and conditions of their tenancies and leases with HDB will remain.

 

JR Kyushu investing in South East Asia real estate

JR Kyushu, which is benefiting from a tourism boom with record numbers of visitors to Japan, gets most of its profits from real estate and station buildings. The company said in its mid-term plan it aims to spend 80 billion yen over three years on some sectors that will help boost sales from non-rail sources as the population on the island declines.

It was seeking to raise as much as 416 billion yen in an IPO, and planned to reduce its reliance on Japan by investing in residential and office properties in Southeast Asia.

Investing in Southeast Asia will be a first for the company, which owns five restaurants in China. Japan makes up almost all of the company’s revenue, according to data compiled by Bloomberg. In addition to real estate, the company also operates restaurants in Shanghai and Tokyo. JR Central, the nation’s busiest bullet train operator, also has a restaurant in London.

According to the Chairman, Southeast Asia offers huge growth potential for JR Kyushu. JR Kyushu plans to expand its non-rail sales to more than 62 percent of revenue by March 2019, from 57.5 percent in the year ended March 2012, according to the mid-term plan. Sales are forecast to increase to 400 billion yen in the same period, from 333 billion yen seven years earlier.

The company expects at least as many tourists to Kyushu this year as the 2.8 million who visited last year, as the island recovers from the earthquakes in Kumamoto prefecture in April, Karaike said.

“Foreign visitors from Asia used to come to Japan for the purpose of massive shopping, but their interest is shifting to culture, history, dining, and other aspects that are only available in Japan,” the executive said.

Based in Fukuoka City, about 890 kilometers (550 miles) southwest of Tokyo, the JR Kyushu is benefiting from record overseas visitors to Japan, spurring demand for its hotels, shops and restaurants, as well as train travel. Visitors to Kyushu from overseas reached 2.8 million last year, more than doubling from 1.3 million two years earlier, according to the transport ministry.

https://www.bloomberg.com/news/articles/2016-10-11/ipo-candidate-jr-kyushu-scouts-property-deals-in-southeast-asia

Goodwood Park investors bought out

Goodwood Park Hotel was buying out its remaining minority shareholders. The Khoo family used Hotel Holdings, a private vehicle, to mount a voluntary unconditional cash offer in Oct 2016 for all the remaining shares it does not own at $43 per share.

The offer values the company at $1.85 billion. Accordingly there were 183 minority shareholders. These investors would have chosen to hold their stock despite the firm delisting after a buyout offer in 2004.

Hotel Holdings owned 24.24 per cent of Goodwood Park Hotel, with irrevocable undertakings from parties holding a further 75.43 per cent. That brings the total held to about 42.8 million shares or 99.67 per cent of the company.

This means that the 183 minority shareholders collectively own a mere 0.33 per cent stake in Goodwood Park Hotel.

Hotel Holdings said the move is aimed at consolidating the holdings of Goodwood Park Hotel – comprising the Goodwood Park Hotel, York Hotel and Royal Garden Hotel – under a single holding company. The three hotels have a total gross market valuation of $1.03 billion, according to an independent valuation by CBRE.

Konnichiwa CDL

As one of its overseas expansion push, City Developments (CDL) has entered into the land of the rising sun, with the acquisition of a 20 per cent stake in a residential project in one of Tokyo’s poshest areas. The move is in line with CDL’s diversification strategy to accelerate its overseas expansion.

CDL bought the stake from Mitsui Fudosan Residential for a confidential sum. The 163-unit project, Park Court Aoyama The Tower, has a total gross development value of more than 50 billion yen (S$666 million).

Apparently the Japan’s real estate sector, in particular within Tokyo, is experiencing a strong boom in its residential market, with robust demand for well-located condominiums.

The project is in the Aoyama area within Minato ward – the centre of business activity, and home to the offices of many multinational corporations and foreign embassies.Park Court Aoyama The Tower, a 26-storey freehold development, is targeted at high-end domestic and foreign buyers.

Apartment sizes range from 389 sq ft to 3,789 sq ft, and an initial 55 units will be launched for sale. Prices will start from 178.8 million yen for a one-bedroom unit, 199.4 million yen for a two-bedder and 271 million yen for a three-bedroom unit.

CDL’s first partnership with its Japanese partner was in 2011 when it bought a prime site in Ginza for its flagship hotel in Japan. The site was developed into a 329-room hotel that is managed by Mitsui Fudosan Group. Park Court Aoyama The Tower is the second collaboration between CDL and Mitsui Fudosan Group in Japan.

To date, CDL (including Millennium & Copthorne Hotels, and CDL Hospitality Trusts) has poured in more than 50 billion yen in 2 residential developments and 3 hotels in Tokyo.

 

Marine and Energy Service Provider selling 5 industrial sites

Wartsila Singapore, which provides services for the marine and energy power plant sectors, was looking to sell five industrial properties in the west. The sites at 11 Pandan Crescent and 14 Benoi Crescent were considered to be sold with leaseback arrangements.

The other three att 43, 45 and 47 Gul Drive were marketed to be outright sales with vacant possession on completion.

The Finland-listed Wartsila is reducing its asset load to focus on core operations, and has also sold assets in Finland. Wartsila Singapore, which was set up here in 1982 and has more than 1,000 employees, plans to lease back the properties at 11 Pandan Crescent and 14 Benoi Crescent and continue to house its staff here.

There was intention to spend about $20 million on 11 Pandan Crescent – which has three factory-cum-workshops, a canteen and a five-storey ancillary office block, and land area of about 35,500 sq m, including 3,110 sq m of waterfront land facing the Pandan River.Wartsila will also spend about $6 million on 14 Benoi Crescent, which has a front-facing three-storey ancillary office block, and a single-storey factory-cum-workshop at the back, with a land area of about 9,860 sq m. The indicative asking prices were $40 million for 11 Pandan Crescent and $11 million for 14 Benoi Crescent.

The two sites could also attract developers and fund managers who are looking for high-yielding assets with (a) strong tenant brand name and stable income to add to their industrial portfolio.

The asking prices were $8 million for 43 Gul Drive, $6.4 million for No. 45 and $5.7 million for No. 47. They range from $230 psf to $288 psf on existing floor areas. The divestment via an expression-of-interest exercise closed at 3pm, on Friday, Oct 14.

Prime Waterfront Homes and Living in Singapore

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