Lifestyle hub at one-north could boost housing prices, retail rents

THE upcoming integrated development at one-north is expected to generate more interest in the area and drive up housing prices and retail rents there, market watchers said.

On Sunday, property giant CapitaLand and New Creation Church’s Rock Productions said they will be investing some $660 million to build a lifestyle hub in one-north, JTC Corporation’s science hub. The project will be located right next to Buona Vista MRT station.

The hub, which will be the biggest retail development by far in the area once it comes up by 2011, will push up residential prices and rents as well as rentals for retail space in the vicinity, experts said.

‘You probably will see residential and retail prices going up in the area,’ said Mavis Seow, CB Richard Ellis’ executive director for retail services.

‘The Holland area is already a very much sought after location. Once the project is developed, it will only get better.’

Rents in the Holland Village area are now between $8 and $15 per square foot per month (psf pm), she said.

CapitaLand, which will invest some $380 million, will own the retail and entertainment component of the project, which will have some 180,000-200,000 sq ft of net lettable area.

Rock Productions will invest $280 million. The company, which is the business arm of the 16,000-strong New Creation Church, will manage the hub’s civic and cultural zone, which will include a 5,000-seat state-of- the-art theatre. The civic and cultural zone will have a gross floor area of some 323,000 sq ft in all.

Pua Seck Guan, chief executive of CapitaLand’s retail arm, said that in line with the developer’s asset-light strategy, the retail and entertainment component could eventually be injected into the developer’s listed real estate investment trust (Reit) CapitaMall Trust.

‘The hub will not be a traditional shopping mall,’ he said. ‘As the developer, we will take the risk – until investors are convinced it is sustainable – before selling.’

The mall will have mostly F&B and entertainment units as is the case with Clarke Quay, Mr Pua said. The retail component will be smaller than in CapitaLand’s other malls.

Possible tenants could include a gourmet supermarket, trade services catering to people living and working in one-north, and even a dance club, he said.

The hub is however guaranteed some footfall from New Creation Church’s congregation, said Matthew Kang, director of Rock Productions.

New Creation Church will be the theatre’s ‘anchor tenant’ and will hold both its Sunday and weekday service there.

At present, the church uses the Rock Auditorium at Suntec City, which seats about 1,400 people.

‘We wanted to look for a place to move to; the congregation was getting bigger,’ Mr Kang said.

Source : Business Times – 11 Sept 2007

BH Global to buy Penjuru land for $2.5m

BH Global Marine, a supply chain management company, has entered into an option agreement to purchase a property at 10 Penjuru Lane for $2.5 million. The land, which has area of about 11,700 square metres, is adjacent to BH Global’s headquarters at 8 Penjuru Lane and will add on to the existing land area of 8,533 sq m. The lease period is extendable up to 2049 subject to lessor JTC’s terms and conditions. A warehouse as well as office blocks will be built on the premises.

Source : Business Times – 11 Sept 2007

$660 million lifestyle hub to go up at Buona Vista – 5,000-seat theatre, shops part of Rock Productions, CapitaLand project

COME 2011, a futuristic-looking lifestyle hub with a 5,000-seat theatre, restaurants, shops, chill-out wine bars and even dance clubs will emerge in Buona Vista.

Property giant CapitaLand and a church-linked business company, Rock Productions, announced yesterday that they will jointly develop an integrated complex in Singapore’s one-north science hub at a cost of $660 million.

CapitaLand’s share of the proposed development, including the ownership of about 1,000 carpark lots, will be about $380 million.

Rock Productions – the business arm of the 16,000- strong New Creation Church – will invest $280 million.

The complex, which will be connected directly to the Buona Vista MRT station, will be sited within the 17ha Vista Xchange, the business service centre as well as lifestyle and cultural hub of one-north.

Designed by Mr Andrew Bromberg of Aedas Hong Kong, it will have eight levels of civic and cultural space, and four levels of retail and entertainment space.

The project came about after JTC Corporation last Friday awarded Rock Productions the tender to build, lease and operate an integrated civic, cultural, retail and entertainment hub at Vista Xchange on a 60-year lease at a land price of $189 million.

Rock Productions had spoken to a few partners and decided on CapitaLand, which entered into an agreement through its indirect wholly owned subsidiary One Trustee to acquire the hub’s retail and entertainment zone, which has a gross floor area of more than 24,000 sq m.

CapitaLand Retail will also manage the entire development of the integrated hub.

It is proposing an open concept for the retail and entertainment zone, which will be spread over two floors above the ground and two basement levels. The basement levels will house chic tenants that will include restaurants, cafes, thematic dance clubs, a concept food hall and a gourmet supermarket.

CapitaLand Retail chief executive officer Pua Seck Guan said the zone presents a unique opportunity for CapitaLand to extend its presence to the Buona Vista area.

The zone will cater to the affluent crowd from the nearby Bukit Timah, Holland and Rochester Park areas, as well as the visitor catchments from the one-north communities, surrounding estates and tertiary institutions, he said.

Rock Productions will own and manage the hub’s civic and cultural zone, which has a gross floor area of 30,000 sq m. This zone will have a 5,000-seat state-of-the-art theatre designed by world renowed performing arts facility design consultants Artec Consultants and Bromberg.

Among Artec’s best-known projects are the Lucerne Culture Centre in Switzerland and the concert hall and opera theatre at the Esplanade here.

Rock Productions has engaged IMG Artists, a global performing arts management company, to work on the marketing and programming efforts for the zone.

A major tenant has already been secured.

New Creation Church, which now holds its services at The Rock Auditorium at Suntec City, will be the anchor tenant of the theatre, using the space on a large part of Sundays and one mid-week night, said Rock Productions director Matthew Kang.

Rock Productions also owns and manages The Rock Auditorium and Marine Cove, the recreational and dining establishment at East Coast Park.

Source : Straits Times – 10 Sept 2007

’Goldman fund buying Chevron House’

A Goldman Sachs-linked fund is believed to be the buyer of Chevron House (formerly Caltex House) whose sale by CapitaLand and its partners was announced last week. The deal values the leasehold Raffles Place office block at $730 million or a record $2,780 per square foot (psf) of net lettable area. CapitaLand last week declined to identify the buyer.

Market watchers noted that Chevron House will be Goldman Sachs’ second major acquisition of an office property in Singapore. A Goldman Sachs real estate fund bought DBS Towers 1 and 2 on Shenton Way in November 2005 for $690 million, or around $800 psf of net lettable area.

‘They could reap a nice profit if they decide to sell DBS Towers 1 and 2 today, given that they bought the asset during the early days of the office market upcycle,’ an industry observer noted.

Industry watchers said that capital values of offices in Singapore today are around two-and-a-half times what they were in the final quarter of 2005 so based on that, DBS Towers 1 and 2 should be able to command around $2,000 psf or possibly even more, given the shortage of offices.

This is despite the leasehold tenure of the property. The older 49-storey Tower 1 was completed in 1974, while the 34-storey Tower 2 was completed 13 years ago. The property has parking for about 400 cars.

Goldman Sachs bought the property from DBS, which leased back the office space it then occupied in the two towers for an initial eight-year term, with an option to renew the lease for two three-year periods, according to an earlier news report.

As for Chevron House, the change of ownership is taking place through shares in Savu Properties Ltd. Basically, CapitaLand, IP Property Fund Asia and NTUC Income Insurance Co-operative are selling their respective stakes – of 50 per cent, 25 per cent and 25 per cent – in Savu, which owns Chevron House, which stands on a site with a remaining lease of about 81 years.

CapitaLand said in its release last week that the completion date for the deal is Sept 24, and that upon completion, it will recognise in its group consolidated accounts a gain of about $150.8 million.

CapitaLand also owns a 50 per cent stake in neighbouring Hitachi Tower, where an exclusivity period has been granted to a potential buyer to conduct due diligence after discussions with the previous top bidder hit some snags, BT understands.

If the latest negotiations for the 999-year leasehold Hitachi Tower succeed, a new benchmark price is expected to be achieved for a Singapore office block.

Source : Business Times – 06 Sept 2007

Apollo Centre up for sale for over $200m

APOLLO Centre, a commercial building in Havelock Road, is for sale for more than $200 million, the property firm marketing it said yesterday.

The 99-year leasehold property is being sold by Singapore-listed Apollo Enterprises.

And since the sale was announced, there have been many enquiries from potential investors, said marketing agent Knight Frank.

‘Given the lack of similar investment buildings in the market and the many interests expressed, a transaction price in excess of $200 million is not unexpected,’ it said.

At $200 million, the price would work out to $1,345 per square foot (psf) of net lettable area.

By comparison, almost a whole floor of nearby Chinatown Point was sold recently for about $1,250 psf of net lettable area.

The Apollo Centre, a seven-storey office and retail building, has a land area of about 54,600 sq ft, and a gross floor area of around 217,500 sq ft. At present, the net lettable area is 148,700 sq ft.

There are shops in the basement and on the first and second storeys and offices on the upper floors.

Because of the limited supply of office space in the central business district, Apollo Enterprises has obtained in-principle approval to change the use of the building’s second storey from retail to office.

If the whole floor is converted to office space and targeted at a single occupier, the lettable floor area could increase by about 11,000 sq ft, Knight Frank said.

It said rents in the area range from $7.50-$8.00 psf per month (psf pm) for office space and $8.00-$8.50 psf pm for retail space.

The tender for the Apollo Centre is open until 3pm on Oct 16.

Source : Business Times – 04 Sep 2007

Chevron House sets record price for office block deals

CapitaLand and its partners have sold their stakes in Chevron House (formerly known as Caltex House) at Raffles Place in a deal that values the leasehold office block at $730 million or $2,780 per square foot of net lettable area.

This sets a new record for an entire office building, surpassing the $2,650 psf set earlier this year for the freehold 1 Finlayson Green. Chevron House stands on a site with a remaining lease of about 81 years.

Market watchers are wondering if a new record price will soon be achieved, possibly for Hitachi Tower next to Chevron House and in which CapitaLand also has a 50 per cent stake.

The 999-year leasehold Hitachi Tower, which faces Collyer Quay, was earlier reported to have attracted a top bid of $3,200 psf of net lettable area, following an expression of interest exercise.

However, industry talk now is that negotiations with the top bidder may have met with some hitches – although it is suggested that this does not necessarily mean the deal is off. ‘It could just mean that negotiations may now be open with the other bidders,’ one observer said.

When contacted, a CapitaLand spokeswoman said: ‘The owners of Hitachi Tower are negotiating with several parties to divest their interests, and we will make the appropriate announcement if any definitive agreement has been signed.’

CapitaLand owns Hitachi Tower jointly with National University of Singapore.

The property giant declined to identify the party to whom it and its partners have sold their stakes in Chevron House. But it is believed to be a foreign fund.

‘Globally, in the real estate investment market, it is the international funds that are buying, because that’s where the capital is being raised. And you have a whole variety of investors – including private equity, savings (including pensions), professional investment groups,’ an industry player said.

Jones Lang LaSalle is understood to have brokered the sale of Chevron House.

CapitaLand owns a 50 per cent stake in Chevron House, with IP Property Fund Asia and NTUC Income Insurance Co-operative each holding 25 per cent. The three parties own their stakes in Chevron House through Savu Properties Ltd and under yesterday’s deal, are selling their stakes in this company.

The completion date of the sale is Sept 24. ‘Upon completion, CapitaLand will recognise in its group consolidated accounts a gain of approximately $150.8 million,’ the group said yesterday.

The average prime office capital value rose 117 per cent year-on-year in the second quarter of this year to $2,500 psf, while average monthly Grade A office rental value in Q2 this year was $13.10 psf, up 92.6 per cent from the same period last year, according to CB Richard Ellis data.

Source : Business Times – 31 Aug 2007

CapitaLand sells 50% stake in Chevron House for over S$366m

CapitaLand has sold its entire 50 percent stake in Chevron House for over S$366 million.

When the deal is done, the property developer will book a gain of S$151 million on the investment.

Chevron House is an office building in the banking and financial district of Raffles Place.

It was formerly known as Caltex House.

CapitaLand has been taking advantage of the buoyant office property market to divest its interest in several commercial buildings.

Another of its property, Hitachi Tower, is also said to be up for sale. – CNA/ms

Source : Channel NewsAsia – 30 Aug 2007

CapitaLand buys remaining 50% stake in Eureka Office Fund

CapitaLand has acquired the remaining 50 percent stake in Eureka Office Fund for S$590.6 million.

The fund owns the commercial building known as 1 George Street and 163 strata-titled units in The Adelphi.

It also owns a 20 percent interest in Temasek Tower.

CapitaLand says the transaction is not expected to have any material impact on its net tangible assets or earnings per share for this financial year. – CNA/ch

Source : Channel NewsAsia – 28 Aug 2007

LaSalle makes top bid for Anson Road site

LASALLE Investment Management (LIM) was the top bidder yesterday for a 99-year leasehold commercial plot next to International Plaza, with a bid of $237.2 million or $941 psf of potential gross floor area.
 
 LIM, which bid on behalf of its LaSalle Asia Opportunity III Fund, is planning a 20-storey office development with about 200,000 sq ft net lettable area. ‘It’ll be a Grade A, ‘Gold Standard’ building,’ said LIM regional director Andrew Heithersay.
 
 LIM managing director (Asia Pacific) Ian Mackie said: ‘We may or may not take a joint venture partner for the development.’ The office development, near Tanjong Pagar MRT station, will target occupiers looking for cheaper accommodation close to downtown, he added. The project may be completed around late 2009.
 
 LIM’s top bid for the 27,281 sq ft plot was 7.8 per cent lower than the $1,021 psf per plot ratio that Mapletree Investments paid for a bigger site across the road last month. The price was lower as the latest site is ‘inferior in shape and size, resulting in an office development with a much smaller floor plate of around 12,000 sq ft – compared with 22,000 sq ft for the earlier site – as well as lower efficiency’, said an analyst.
 
 A Mapletree unit was the second highest bidder at yesterday’s tender, at $800 psf ppr – 15 per cent below LIM’s price. The only other bidder, Wing Tai, offered $634 psf ppr.
 
 CB Richard Ellis estimates that LIM’s bid reflects a break-even cost of $1,700-1,800 psf. ‘This would provide the successful bidder with a stabilised yield of around 4.5 to 5.0 per cent, based on a gross monthly rent of $9 to $10 psf,’ it said.
 
 However, industry sources suggest LIM is looking at a $13 psf average monthly rent. The Anson Road site will be the maiden Singapore investment for the LaSalle Asia Opportunity III Fund, which is planning to make about US$12 billion worth of acquisitions over the next three to four years. ‘Singapore remains one of our primary target markets. We’re interested in all sectors – office, retail, industrial, residential and hotel,’ Mr Heithersay said.
 
 Earlier acquisitions here by LIM for its other funds include the collective sale of Rainbow Gardens at Toh Tuck Road, and Swissotel Merchant Court hotel, as well as stakes in two hotels opening next year – Crowne Plaza Changi Airport and Ibis Bencoolen Street.
 
 LIM, part of the Jones Lang LaSalle group and a leading real estate money management firm, yesterday also announced an A$738 million (S$926 million) acquisition, on behalf of Asia Property Fund, of a 50 per cent stake in the Westfield Doncaster mall development in Melbourne.
 
 Source : Business Times – 29 Aug 2007

CapLand finalising buy of Eureka Office Fund stake

CAPITALAND said yesterday it is finalising the purchase of its partner’s 50 per cent stake in Eureka Office Fund, which owns One George Street and 163 strata-titled units in The Adelphi.

CapitaLand and Eureka GmbH, part of Munich Re Group, have equal stakes in the fund.

CapitaLand, which was responding to a BT report yesterday saying it was eyeing full control of One George Street, did not give further information. But it is widely known in property circles that a collective sale of The Adelphi, a 999-year leasehold property in the City Hall area, is being explored.

When Eureka Office Fund was created in 2001, it controlled 100 per cent of the offices and 38 per cent of the retail units in The Adelphi, had a 19.92 per cent stake in Temasek Tower and 100 per cent of Pidemco Centre in South Bridge Road.

The Pidemco Centre was later redeveloped into One George Street.

Earlier this year, the fund and CapitaLand sold their entire stakes in Temasek Tower for $1.04 billion.

Source : Business Times – 24 Aug 2007