Category Archives: Dining

Sime Darby Centre@Bt Timah sold to Tuan Sing

Developer Tuan Sing Holdings bought Sime Darby Centre in Bukit Timah for $365 million. The property at 896 Dunearn Road sits on a commercial site of 140,886 sq ft (part freehold /part 999-year leasehold) with an allowable gross plot ratio of 1.8 and a maximum permissible gross floor area of 253,595 sq ft. It is 96 % occupied over a net lettable area of around 202,712 sq ft. The tenants include kitchenware retailer ToTT, Scanteak, Cold Storage and ChildFirst pre-school.

New York-based private equity giant Blackstone Group had bought 70 % stake in Sime Darby Centre for just under $200 million last year from Malaysian palm oil producer Sime Darby Berhad, according to media reports.

This means Tuan Sing’s purchase resulted a 25% gain for Blackstone on its investment. There is a significant potential for commercial activities that can serve the needs of the vast residential community in the vicinity, thus the asset can generate long-term revenue and profit.

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Sime Darby Centre for sale

Blackstone Group plans to sell Sime Darby Centre in Bukit Timah, one of the office and retail assets it acquired last year from Malaysian palm-oil producer Sime Darby Berhad, according to people familiar with the matter.

Located in an ageing commercial block along Dunearn Road and directly in front of King Albert Park MRT station, Sime Darby Centre houses tenants like kitchenware retailer ToTT, Scanteak, Cold Storage and ChildFirst pre-school. The block consists of builtup area of 250,000 sq ft — 80 per cent is office space and the rest is retail. The development sits on freehold and 999-year leasehold land parcels zoned for commercial use and with 1.8 plot ratio.

Blackstone owns a 70 per cent stake in the Sime Darby Centre and Sime owns the rest. The conglomerate, Malaysia’s biggest listed palm-oil producer, sold some property assets in Australia and Singapore to help pare debt.

The site could attract bids from large and mid-sized Singapore developers including Far East Organization, City Developments, Frasers Centrepoint and United Industrial Corp.

The New York-based private equity firm expects to fetch about S$300 million for Sime Darby Centre, which it bought for just under S$200 million last year. Blackstone in May acquired a majority stake in three Singapore property assets, including the Sime Darby Centre, in a deal that valued them at about S$300 million.

Blackstone, which manages more than US$100 billion (S$140 billion) in real estate assets worldwide, in the past has bought residential apartment blocks in Singapore’s prime area.

Shophouses in the vogue again among investors

Investment in Singapore shophouses has stabilised and shows signs of picking up after taking a hit following the introduction of a loan curb in 2013. Total transaction value has been rising in the past two years even though the number of caveats lodged remained fairly steady at just over 100 a year.

Transaction value rose by about 7.6 per cent to $707.07 million last year, from $657.3 million in 2015. Demand for shophouses fell off a cliff in 2014, after the imposition of the total debt servicing ratio (TDSR) framework at the end of June 2013.

Three adjoining 999-year tenure shophouses in Amoy Street in Tanjong Pagar were recently acquired by an institutional fund for $59.6 million, or about $2,500 per sq ft, based on the floor area. In another deal, a family office bought a shophouse at 54 Boat Quay for $12.9 million or about $2,985 psf on the floor area.

Office properties, seen as a proxy for shophouses, have faced challenging leasing environment as a deluge of new office buildings weighed on rents in recent years. The average rental yield for shophouses ranges from 2.5 to 3.5 per cent, depending on the tenure of the asset.

Frasers Tower received strong interest ahead of its completion

About 30 per cent of upcoming Frasers Tower, in the heart of the Central Business District, has been leased – or has received a leasing proposal. The relatively strong interest comes even though the 38-storey office building in Cecil Street is not due to be ready for tenants for more than a year.

The interest came from multi-sector conglomerates, legal services and technology firms, including the first signed lease with The Executive Centre, a serviced office provider, which will take up an entire floor covering 20,000 sq ft.

The supply pipeline favours Frasers Tower, as there are just a few new developments in the core CBD from mid-2017 until the end of 2020: Marina One, UIC Building and the redevelopment of the CPF Building. Frasers Tower has 663,000 sq ft in total net lettable area. An adjacent three-storey building will host food and beverage tenants.

 

Middle Road Complex on sale again

THE Prospex, a retail and office building in the Middle Road near Bugis +, is back on the market, this time with an indicative guide price “in excess of S$70 million” — lower than the S$80 million asking price when the building was previously put up for sale in October 2015.

A price of S$70 million translates to S$2,081 per square foot (based on the total net lettable area (NLA) of 33,631 square feet) with a 99-year leasehold tenure with a balance term of about 57 years.

Located at the busy corner of Middle Road and Victoria Street and just a stone’s throw from Bugis MRT Station, The Prospex consists of a two-level retail podium (with 4,040 sq ft NLA) and seven levels of offices above (29,591 sq ft).

The building is about 85 per cent leased with the top floor and some units on the seventh floor still available for lease.

Prospex is being offered by Hong Kong and Singapore-based property fund manager Pamfleet, which bought the former Bright Chambers on the site at S$45 million in 2013 and made major additions and alteration works to the building to achieve its current modern look. The Prospex received a Temporary Occupation Permit in the first quarter of 2016.

Tenants in the building include: Shanghai-based Mellower Coffee (which occupies the entire two-level retail podium); 701 Search backed by SPH; and Zrii, an international nutrition company based in Utah.

As the property sits on land fully zoned for commercial use, foreigners may buy without regulatory approval . There is also no additional buyer’s stamp duty and seller’s stamp duty for such property.

Online Stores getting offline presence amidst slump

The falling rental rates provide a silver lining for online retailers amid the current retail slump.These retailers have a chance to venture offline and into shopping malls. Last month, for example, online furniture retailer HipVan opened its permanent 11,000 sq ft flagship store at The Cathay in Dhoby Ghaut.

Lifestyle retailer Naiise similarly opened its 8,500 sq ft flagship store in that mall last June. Other online retailers, such as Reebonz, Love Bonito and Ohvola, have opened short-term stores in Suntec City and Orchard Gateway, to catch shoppers who want to see, touch or try on a product before buying.
 The islandwide vacancy rate for retail space was 7.5 per cent at the end of last year, up from 4.5 per cent at the end of 2013, Urban Redevelopment Authority (URA) data showed.
The Median rental rate per sq ft per month for the Orchard Road area is $9.82, the first time it fell below $10. The median rental rate for retail space in the third quarter of last year was the lowest on record. 

The median rental rate for retail space in the third quarter of last year was the lowest on record, falling to $9.82 per sq ft per month for the Orchard Road area – the first time it fell below $10, according to URA data.

Naiise has five other stores in malls such as Westgate and 112 Katong, which offer self-collection services for online orders. Its online plus offline strategy has paid off, with its six retail stores combined now generating more revenue than its online store.

 

HipVan co-founder Danny Tan, 33, said the retail slump has benefited his business, which now occupies the space formerly rented by sportswear brand Adidas. The store is seven times larger than HipVan’s previous pop-up space in Millenia Walk and Suntec City. It features more than 1,000 of HipVan’s bestsellers, including beds, dining tables and rugs. Its website attracts 200,000 to 300,000 views a month, while revenue has been growing by 12 per cent on average every month.

Meanwhile, high-end fashion retailer Reebonz, whose lease for its pop-up boutique in Suntec ends next year, is moving into its own eight-storey building in Tampines this month. The building will house a permanent showroom.

Good Take-up at Guoco Tower space

TECH and media companies are making their presence felt at Guoco Tower in Tanjong Pagar, accounting for 37 per cent of the space that has already been committed.

The premium Grade A office component of Tanjong Pagar Centre, a mixed-development project being built by the listed GuocoLand group, has 890,000 sq ft net lettable area of which 80 per cent or some 712,000 sq ft is either taken up or subject of advanced leasing discussions. Of this space, approximately 263,000 sq ft has been committed by tech and media companies, including Amadeus and OpenLink.

Earlier media reports also tipped Agoda, Dentsu Aegis Network, Palo Alto Networks, ING, Itochu Singapore, and SAS Singapore as heading for Guoco Tower. Dentsu Aegis is expected to be the biggest tenant with about 100,000 sq ft.

GuocoLand has also named as new tenants The Straits Trading Company, which will be moving out of 9 Battery Road; Danone, which is exiting Goldbell Towers along Scotts Road; shoemaker Asics, which will be leaving PWC Building; and Teva Pharmaceutical Industries, which is exiting three locations.

The offices, which received Temporary Occupation Permit (TOP) last month, are on the lower 38 levels of the 64-storey tower, which is Singapore’s tallest building at 290 metres. Levels 39 and upwards of this tower comprise the 181-unit Wallich Residence. A second tower houses the 222-room Sofitel Singapore City Centre. Both of these components are expected to receive TOP between late this year and early 2017. The project also has a retail component, part of which has already received TOP.

Guoco Tower is counting on its prime location, flexible, efficient and scalable design, Tanjong Pagar Centre’s tightly integrated retail and lifestyle components, and of course, the prestige factor of being in Singapore’s tallest building as its selling points.

Most of the MNCs in Guoco Tower will be using it as their regional headquarters with average headcounts of 300 to 500 persons, coupled with relocations of many of their senior management staff from their other headquarters or regional offices to Singapore.

This would create a lot of demand for F&B, services, hotels and even housing in the area and catalyse Tanjong Pagar’s transformation. The gross effective monthly rents at Guoco Tower are estimated to be between S$8.50 and S$11.00 per square foot – comfortably above the average of S$7 to S$8 psf in the Tanjong Pagar office micromarket, and comparable to other premium Grade A developments in Marina Bay.