Digital Realty Trust plans second data centre in Singapore

NYSE-LISTED data solutions provider Digital Realty Trust (DRT) said on Thursday it will soon launch its second data centre in Singapore, in which it expects to invest over US$200 million depending on ultimate customer configuration, density and scope.

This underscores the company’s commitment to Singapore’s Smart Nation plan, which encourages the sustainable supply of data centres to ensure sufficient future capacity, DRT said in a statement.

It added that the new facility also addresses a growing demand for agile, open and connected data centre solutions from the cloud, and content providers and financial services companies across the region and worldwide.

DRT’s new data centre, to be located in north-east Singapore and spanning about 177,000 square feet, will connect via dark fibre to its first data centre, which was opened in 2011 and is located in the western part of the Republic. It is home to global Tier 1 carriers, the Singapore Internet Exchange and the Digital CloudConnect network.

Collectively, these facilities will offer geographic diversification and increased options for diverse IT workload deployments in Singapore, said DRT.

Said Kiren Kumar , director of information communications and media at the Singapore Economic Development Board: “With the growing demand for premium data centre services, it is imperative for leading data centre providers such as DRT to continue raising the bar to strengthen Singapore’s position as a leading data management and connectivity hub.

“Aligned to our vision for Singapore to become the digital innovation capital of Asia, DRT’s expansion will enable both local and international companies to build new digital capabilities and scale critical digital services in a cost effective and efficient manner.”

SWFs and Pension funds around the world moving into real estate and infrastructure

SOVEREIGN wealth funds and public pension funds have been moving aggressively into real estate and infrastructure to offset low returns in traditional markets, raising the risk of asset bubbles, said the Global Public Investor 2015 (GPI 2015) report. The survey of 500 global public-sector institutions across 180 countries found that central banks, on the other hand, continue their purchases of equities.

Total assets under management, including gold, of these 500 public sector asset managers rose 1.8 per cent or US$520 billion in 2014 to US$29.7 trillion. Growth was primarily driven by public pension and sovereign funds.

The Official Monetary and Financial Institutions Forum (OMFIF), the global research and advisory group behind the report, estimates that 9.1 per cent or US$2.7 trillion of the total assets held by the 163 central banks, 89 sovereign funds and 248 public pension funds surveyed lie in real estate and infrastructure.

This estimate is based on a survey OMFIF carried out in November 2014, which also found that 44 per cent of sovereign funds and public pension funds intend to raise their real estate and infrastructure holdings in the next three to five years. Fifty per cent intend to maintain their current holdings, and only 6 per cent will lower their allocations to this asset class.

The report added that asset price bubbles have been building up in sections of capital markets as a result of central banks’ quantitative easing, and may now be spreading to real estate and infrastructure investment.

GPI 2015’s ranking of the top 10 global public investors by the size of their total assets under management remained largely unchanged from a year ago. The People’s Bank of China topped the list again with assets of US$3.9 trillion, followed by the Japanese Monetary Authorities and Japan’s Government Pension Investment Fund. The only new entrant to the top-10 list was Italy’s sovereign fund Cassa Depositi e Prestiti, which rose a spot to replace the Central Bank of the Russian Federation in 10th place, after Russia depleted reserves last year to stop the rouble’s fall.

Singapore institutions on GPI’s ranking of the 500 global public investors did not change much from a year ago either.

According to GPI, GIC’s assets grew 4.1 per cent to US$333.1 billion and climbed a spot higher to 19th place. The Monetary Authority of Singapore’s assets fell 5.9 per cent to US$256.9 billion, but kept its 24th place ranking.

The Central Provident Fund’s assets rose 6.3 per cent to US$202.5 billion to rank 27th. Temasek Holdings, which prefers to refer to itself as an investment company but was included in GPI’s list as a sovereign wealth fund, saw assets rise 3.3 per cent to US$177.3 billion, keeping its 39th placing from a year ago.

Farrer Road Condo clocked only single-digit sales

SINGAPORE Land’s condo project Pollen & Bleu in the Farrer Road precinct has clocked single-digit sales in Singapore and Hong Kong, The Business Times has learnt.

The boutique high-end 106-unit condo in District 10 held previews in Singapore over the weekend of May 1-3, and soft-launched on May 9, releasing around 30 units in its first tranche.

The developer is offering a 15 per cent discount across its units, which translates to average prices of S$1,900 to S$2,000 per square foot (psf) after discount.

This means that 549 sq ft one-bedders are starting from S$1.05 million; 872 sq ft two-bedders from S$1.58 million, and 1,184 sq ft three-bedders from S$2.18 million, according to an agent.

The condo also has four-bedroom units and penthouses whose prices are available on request at the showflat along Ganges Avenue.

Asked what he thought of the project’s performance so far, Michael Ng, group general manager of United Industrial Corp (which privatised Singapore Land in 2014), said: “We are not too disappointed. We clearly think that the product will be appealing when people get on-site. Right now, this is not possible because of the construction going on.”

The project’s appeal, he believes, boils down to its proximity to Botanic Gardens and its overlooking of rooftops of the surrounding townhouses, mainly Sommerville Park, he said.

“On-site construction of Pollen and Bleu is up to the fifth storey for the eight-storey development for two blocks. For the third block, the basement has just been completed.

“At this stage of the launch, we hope to sell 10-20 units, perhaps by the next month or so. We’re just going into the third week, and I think we should be able to hit our target.”

He added that Hong Kong buyers liked the project for its tranquil nature and access to Botanic Gardens’ greenery.

“They looked at the video and appreciated the feel of the development. One actually bought a unit and is considering another one after visiting the site because he really liked what he saw,” Mr Ng said.

The condo sits on a 99-year leasehold plot that Singapore Land won in 2012 for S$113 million, which translates to S$1,049 psf per plot ratio.

In Singapore, it has three agencies – Huttons, Savills and CBRE – marketing the project, while Centaline takes care of the Hong Kong market.

Donald Han, managing director of Chesterton Singapore, said that the muted response to the project is simply a function of the market and its pricing which falls within the S$1,500 to S$2,000 psf range that buyers will find hard to stomach.

Century 21 chief executive Ku Swee Yong said that projects need to be more attractively priced in this market where people are expecting discounts. “For any new product launches these days, to move fast, you either have to show major product differentiation or you have to price it slightly lower.”

The natural comparable for many would be CapitaLand’s massive 1,715-unit D’Leedon on the opposite side of Farrer Road with still over 200 units unsold.

A market observer noted that while D’Leedon’s psf price might be lower (three units sold for S$1,512 to S$1,740 psf last month), the absolute prices will be similar to Pollen & Bleu’s given the latter’s smaller-sized units.

But a better comparable might be other boutique condos such as Far East’s The Siena whose new sale prices averaged S$1,908 psf year-to-date. Meanwhile, sales at Tuan Sing’s Cluny Park has been slow. Its latest transaction, in the fourth quarter of last year, was at S$2,835 psf.

Pollen & Bleu is a short drive from Orchard Road, Holland Village and Dempsey Hill and has reputable schools close by, such as Nanyang Primary School, Anglo Chinese School (International) and Hwa Chong Institution.

Seletar Mall officially opens

SINGAPORE – The latest shopping destination in the northern part of Singapore has officially opened its doors on Thursday (May 21).

The Seletar Mall, developed by The Seletar Mall Pte Ltd, is a joint venture company between Singapore Press Holdings (SPH) and United Engineers Limited (UE).

Conveniently connected to Fernvale Light Rail Transit (LRT) station which links to Sengkang North-East Line (NEL) MRT / LRT station and Sengkang bus interchange, The Seletar Mall has six levels of retail and three levels of parking.

The opening ceremony held earlier today was officiated by Guest of Honour Dr Lam Pin Min, Minister-of-State, Ministry of Health and Member of Parliament and Grassroots Advisor for Sengkang West GROs, together with Dr Lee Boon Yang, Chairman of SPH, Mr Tony Mallek, Chairman of The Seletar Mall Pte Ltd and Mr Roy Tan, Group CFO of UE.

More than 200 invited guests including tenants and partners of The Seletar Mall attended the event.

The family-oriented mall, with 100 per cent occupancy, houses over 130 shops.

The destination mall has plenty to offer from fashion to F&B choices. Key tenants include UNIQLO, BHG departmental store, Foodfare foodcourt and Amore Fitness & Boutique Spa.

Those wanting to catch movies can do so as Shaw Theatres cineplex is located there.

To celebrate the mall’s official opening, all shoppers will enjoy free parking from 9am to 5pm on May 21.

In addition, the first 100 shoppers who present a cut-out coupon from the mall’s congratulatory advertisement and have a minimum spend of $30 (maximum three receipts combined) can redeem a limited edition tote bag.

Singapore hotel market to remain tough for buyers: CBRE Hotels

THE Singapore hotel market attracted robust interest from investors in the first quarter of this year but remained a challenging market for buyers, according to CBRE Hotels.

As a result, there were a limited number of deals in Q1 2015.

“Investors turned more cautious during the period and become more rational and analytical when evaluating potential deals,” said CBRE Hotels (Asia Pacific) assistant vice-president Junrong Teo in a report. “As with the broader investment market, there is a bit of a price gap at present with vendors under no real pressure to sell, although CBRE does still see some opportunities in the market.”

A single deal was recorded in Q1 2015, a related-party transaction where Frasers Centrepoint acquired Capri by Frasers at Changi City from Ascendas Frasers for US$148 million.

“The market is (expected) to turn more challenging given the slower tourism growth. New supply will impact room rates and will likely cause a slight drop in occupancy,” said Mr Teo. “On the investment side, Singapore will remain a tough market in the short term as high prices and the lack of assets available continue to impede deals.”

Property firm Frasers Centrepoint is looking to expand its portfolio with assets that can increase its recurring income.

Recurring income refers to stable and continual turnover, and can be derived from regular payouts to property owners such as through rent or hotel bookings.

The firm has residential, commercial and hospitality developments around the world, with most in Singapore, Australia and China. It aims to expand its assets through various ways, such as through investments, developments and upgrading.

Revenue for the three months to March 31 came in at $442 million, unchanged from the previous year, but contributions from Australand, a subsidiary of Frasers Centrepoint, and acquisition of six hotels by Frasers Hospitality Trust lifted turnover.

But that was offset by weaker performances by other developments in Australia and Britain.

Last year, recurring income made up 47 per cent of the group’s half-year profit before interest and taxes, while developments made up the rest.

This year, the acquisition of Australand and the listing of Frasers Hospitality Trust sent that up to 59 per cent.

Frasers Centrepoint group chief executive Lim Ee Seng said: “Our strategic objective is to have a portfolio of investment properties. We use the Reit (real estate investment trust) platform to supply assets to the Reit, where we can free up capital for investment in other areas at the same time, to increase our recurring income by managing the Reits.”

Frasers Centrepoint announced yesterday that it has entered into a sale and leaseback agreement on hotel Sofitel Sydney Wentworth with Frasers Hospitality Trust for A$224 million (S$237 million). Frasers Centrepoint sold a 75-year lease.

Ms Eu Chin Fen, chief executive of Frasers Hospitality Trust’sReit management, said: “Sydney was one of the strongest-performing hospitality markets in Australia in 2014 and the outlook remains Property firm Frasers Centrepoint is looking to expand its portfolio with assets that can increase its recurring income.positive in 2015.”

Although Frasers Centrepoint’s venture into Australia has brought significant returns, Singapore still remains the foundation of its activities. Mr Lim said: “Singapore will always be our base. We have established a significant presence in Singapore.”

Frasers Centrepoint recently launched Northpark Residences, an integrated development in Yishun that will feature a library, childcare centre and an underpass to Yishun MRT station. Frasers Centrepoint shares closed down 0.5 cent at $1.830 yesterday.

Corner shophouse block opposite The Central sold for $18.5M

A CORNER shophouse block at the junction of New Bridge Road and Hongkong Street has been sold for S$18.5 million, based on the caveated price.

Located opposite The Central and Clarke Quay MRT Station, the property comprises three shophouses on two land lots with separate lease expiries. One lot has a balance lease term of 25 years and the other, 34 years.

The seller is a Chinese investor who is also a Singapore permanent resident. The buyer is believed to be a company controlled by a property investor of Indonesian origin who is a US citizen.

The property is five storeys high; the fifth storey is part offices and part roof terrace. The ground floor is leased to traditional Chinese medicine chain Ma Kuang. Expedia used to occupy levels two to five; the space is now available for lease.

The building is on 4,317 sq ft of land and is said to have a gross floor area of around 13,500 sq ft, shy of the maximum 18,131 sq ft allowed based on the 4.2 plot ratio for the site, which is zoned for commercial use under Master Plan 2014. There is potential to build a five-storey extension in a void area at the rear. The building is in a secondary conservation area.

By some industry players’ estimates, it could cost around S$8 million to top up the site’s lease to 99 years, and S$2.8 million in exchange for rights to tap the unutilised gross floor area (GFA). Both sums are payable to the state.

On top of that, construction cost to build the additional GFA of around 4,600 sq ft as well as to enhance the existing building could amount to some S$7 million.

Adding all the above costs to the S$18.5 million purchase price, the total outlay works out to S$2,000 psf of potential GFA. Assuming the ratio of net lettable area (NLA) to GFA is 90 per cent, the breakeven cost would be around S$2,224 psf on NLA.

“For a location with prominent frontage and on the basis of a freshly topped up 99-year lease, that sounds like reasonable pricing,” said a seasoned agent.

A stone’s throw away, a shophouse along Hongkong Street changed hands in March for nearly S$17.21 million – which works out to about S$1,900 psf based on the property’s GFA of around 9,060 sq ft. The seller had maximised the plot ratio and had the site’s lease topped up to 99 years in 2013.

Nearby at North Canal Road, a pair of adjacent shophouses on a site with balance lease term of about 32 years changed hands at S$15 million last month.

Prime Waterfront Homes and Living in Singapore


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