Ascott close to selling Liang Court mall: sources
Pramerica Asia fund said to be buyer, paying about $175 million
THE Ascott Group, which last week announced plans to launch a service residences trust, is said to be close to selling Liang Court Shopping Centre for about $175 million to Pramerica Asia, formerly known as GRA Singapore.
BT understands the acquisition is expected to be made by a follow-on fund to Pramerica’s Asian Retail Mall Fund, which was fully invested by late 2004 after buying four malls for $749 million - Whitesands in Pasir Ris, Tiong Bahru Plaza mall, Century Square in Tampines, and Hougang Mall.
Pramerica’s acquisition price works out to a net yield below 5 per cent. The mall, built on a site with a remaining lease of about 71 years, is currently less than 80 per cent occupied.
Things have never quite been the same for the shopping centre ever since anchor tenant Daimaru shut its 100,000 sq ft store at Liang Court in 2003, say industry observers.
Liang Court Shopping Centre’s current draws include Japanese supermarket Meidi-Ya, Kinokuniya book store and Audio House, a low-price electronics superstore.
‘The buyer is looking at a growth story, through improving yields, getting more tenants, sprucing up the tenant mix and capital improvement works,’ said a market watcher.
One way would be for the new owner to change the orientation of the mall, which currently faces River Valley Road, to overlook the Singapore River instead.
Also, the various improvement works going on in the area, including Clarke Quay mall next door, bode well for Liang Court’s future, say market watchers.
Ascott’s parent, CapitaLand Group, which owns Clarke Quay, has revamped its property and added a string of new attractions, including Crazy Horse Paris and Ministry of Sound.
Ascott has long earmarked Liang Court Shopping Centre as a non-core asset for divestment. It has appointed Jones Lang LaSalle to market the property. JLL conducted an expressions- of-interest exercise for the asset which closed in November, BT understands.
Liang Court Shopping Centre comprises a five-storey retail podium with two basement levels. A mezzanine level above the fifth storey is used for offices. In all, the property has net lettable area of about 255,000 sq ft, most of which (about 240,000 sq ft) is retail space.
Assuming a purchase price of about $175 million, the acquisition cost works out to $686 psf of net lettable area.
The Liang Court complex also includes a 26-storey service residences tower, Somerset Liang Court, which will be one of the 12 properties Ascott is pumping into its Pan-Asian service residences Real Estate Investment Trust announced last week.
The complex, originally developed by tycoon Goh Cheng Liang’s Wuthelam Group, also includes a hotel (formerly known as Hotel New Otani) which Wuthelam sold in 2004 to a Lehman Brothers real estate fund for $82 million.
Lehman has since appointed Accor Group to manage the hotel, which has been renamed Novotel Clarke Quay.
Source : Business Times - 25 Jan 2006
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