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DEVELOPER SC Global, better known for its high-end residential projects, is paying $17.8 million for a Martin Road freehold property that can be redeveloped on a residential-cum-commercial basis.

Through its wholly owned subsidiary Kimmingston Pte Ltd, SC Global struck the deal with Hock Giap Company Pte Ltd for the 17,664 sq ft property at 38 Martin Road.

With an estimated development charge of $9.1 million and a gross plot ratio of 2.8, the cost works out to about $544 per sq ft per plot ratio.

An eight-storey warehouse building now sits on the site, with tenants. It has a zoning of residential, with commercial enterprises on the first floor.

SC Global owns a vacant freehold site next to it measuring 26,813 sq ft with a plot ratio of 2.8. It could combine that site with its newest acquisition, giving a land area of 44,477 sq ft.

That could be developed into a 15-storey residential and commercial development with a potential gross floor area of 124,536 sq ft.

Other residential developments near the site include CapitaLand’s 43-storey Rivergate and City Development’s The Pier at Robertson.

Kimmingston has put down 10 per cent of the purchase price for 38 Martin Road and is expected to pay the balance in 12 weeks. The acquisition is expected to be completed in April. Meanwhile, SC Global has called an EGM on Feb 15 for shareholders to vote on whether to allot and issue 5,754,000 placement shares to Mass Noble Ltd at an issue price of $1.35.

Source : Business Times - 27 Jan 2006

Centrepoint said to have paid $55m, plans to use site to extend Northpoint

THE Singapore Land Authority (SLA) has sold a site next to Yishun’s Northpoint Shopping Centre to the mall’s owner, Centrepoint Properties.

Centrepoint, which bought the plot direct from SLA, will use it to extend the mall. It is said to have paid about $55 million.

The land, which is also capable of being developed independently, comprises a cul-de-sac and a vacant state site.

Together, they add up to almost 4,000 square metres (42,843 square feet).

There was no tender process. Direct sales are allowed under SLA policy for such sites, although this rarely happens.

SLA said the state site had been reserved for a future library. But Centrepoint approached the authorities in April 2004 to check whether it could buy the plot direct to extend Northpoint. Centrepoint also suggested the extension could house the library.

SLA chief executive Lam Joon Khoi said: ‘We accepted the proposal as it will optimise the land use, this being our primary objective in the sale of state land.

‘An integrated, mixed-use development, with the library co-located within the commercial development, makes more sense than a standalone civic building, as the two uses complement each other while making it convenient for the public. It allows the cul-de-sac there to be put to good use. This would not be the case if it were a standalone development.’

SLA said the government’s general policy on state land that can be developed independently is to sell it by tender, but ‘within this policy, such state land may also be sold directly to a private owner for amalgamation with his property if there are very good planning, economic and social reasons’.

Elaborating, an SLA spokeswoman said that from National Library Board’s perspective, it would be more cost-efficient to lease floor space in the integrated development than incur the high capital outlay of building and maintaining a standalone library.

‘SLA’s decision was made after careful consideration and after we were satisfied that there are very good economic and social reasons to support Centrepoint’s proposal, and that it will be a win-win arrangement for the state, NLB and the developer,’ the spokeswoman said.

BT understands the library will be on the upper floors - usually lower-yielding space in most malls - of the Northpoint extension.

The extension’s maximum gross floor area (GFA) will be about 12,000 sq metres, of which 2,000 sq metres must be set aside for ‘civic and community institutional use’ - the library.

Centrepoint is free to lease the remaining 10,000 sq metres (107,639 sq ft) on the extension’s lower floors to retail tenants at market rents.

The extension’s total GFA of about 12,000 sq metres is almost 60 per cent that of the existing Northpoint. It is believed the extension is likely to have three storeys and a two-level basement.

The existing Northpoint has four levels and two basement shopping levels, and is built on a 73,200 sq ft site.

SLA made a final offer on the extension site to Centrepoint late last year.

‘The company accepted our offer early this year,’ SLA’s spokeswoman said. She would not reveal the sale price.

SLA is selling the site to Centrepoint with an 83-year lease, so expiry in 2089 coincides with that for the existing Northpoint site, which Centrepoint clinched in a state tender in 1989.

Source : Business Times - 26 Jan 2006

PROPERTY developer Hoi Hup, part of Straits Construction Group, is understood to have bagged the 877-year leasehold Kim Yam Mansion, off River Valley Road, for about $63 million through a collective sale.

The price works out to about $460 per square foot of potential floor area inclusive of a development charge of about $300,000.

Owners of Kim Yam Mansion’s 40 apartments will receive more than $1.5 million each, or up to three times the $500,000-$600,000 the units would have fetched if they were sold individually.

This premium is one of the highest since en bloc sales began in Singapore in 1994. Sellers in most deals these days see collective premiums of about 30-50 per cent.

Jones Lang LaSalle brokered Kim Yam Mansion’s sale.

The four-storey development is about 40 years old.

It has a land area of 49,080 square feet and the site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area).

Based on its purchase price, Hoi Hup’s breakeven cost for a new condo on the site will be about $670-$700 psf, say analysts.

Kim Yam Mansion is the first collective sale to benefit from a new law that took effect last month, facilitating en bloc sales of estates where the original landowner/developer retains the freehold title despite giving flat owners leases ranging from 850 to just under 999 years.

In such estates, strata titles were not issued under an old law, so the developer issued long leases instead. In the past, some of these landowners demanded hefty payments - amounting to millions of dollars - before they would consent to an en bloc sale.

This ate into proceeds for the flat owners, sometimes effectively blocking an en bloc deal.

Jones Lang LaSalle, Kim Yam’s marketing agent, worked with real estate lawyer S K Phang to highlight the anomaly in the law to the authorities.

This was fixed through an amendment to the Land Titles (Strata) Act that took effect on Dec 1, under which such landowners lose all rights to the land upon an en bloc sale.

The Singapore Land Authority has said that in all, 24 sites will be affected by the rule change - but did not identify them to protect the privacy of the present unit owners.

Source : Business Times - 26Jan 2006

THE take-up of vacant industrial land that is ready for firms to develop their own facilities on shot up 153 per cent to hit a 10-year high last year, reflecting strong demand from local companies.

Singapore’s largest industrial landlord, JTC Corp, said the net allocation of this type of industrial land, which comes with road access/frontage and other facilities, was 174.1ha.

The largest taker was the logistics segment, which includes the chemical logistics industry, JTC said. Other big takers were the services and electronics and precision engineering industries.

Apart from steady economic growth, the cuts in JTC’s industrial land rents and prices in January and July last year also helped to spur demand, said a JTC spokesman. ‘The cuts…have helped to keep our industrial land internationally competitive.’

This prepared industrial land, as JTC calls it, also posted the lowest termination rate last year over the past decade, according to JTC’s industrial facilities report for last year released yesterday.

Total occupancy of JTC’s prepared industrial land last year stood at 81 per cent.

JTC’s ready-built facilities including standard factories and business parks also saw strong demand last year, with net allocation at 180,400 sq m, which was almost double that of 2004.

In the ready-built facilities segment, business park space was the star performer, largely because A*Star, the anchor tenant of Biopolis in one-north in Buona Vista, took up additional space there last year.

Business park space, also found at Changi Business Park and International Business Park, caters to the needs of industries involved in high value-added and knowledge-based activities.

Prepared industrial land is one area that JTC will be keeping as it prepares to narrow its focus on two key areas - strategic developments such as one-north and cutting-edge developments like the proposed underground caverns on Jurong Island.

This was made known in November when JTC said it will sell 2.6 million sq m of gross floor area of industrial facilities including 71 blocks of high-rise factories, three business park buildings and three workers’ dormitories.

Details of the sale will be finalised by the second quarter.

Source : Straits Times - 25 Jan 2006

ASCENDAS Real Estate Investment Trust (A-Reit) has turned developer, and will build two warehouse retail facilities costing up to $128 million. It is understood that this will be a first for a Singapore Reit.

Reits are not restricted from developing properties but conditions do apply.

According to the updated Code of Collective Investment Schemes which was out in Oct 20, 2005, and issued by the Monetary Authority of Singapore, the total contract value of property development activities undertaken and investments in uncompleted property developments should not exceed 10 per cent of a property fund’s deposited property. The value of A-Reit’s two development projects currently accounts for about 4.7 per cent of its deposited property. A-Reit has a book value of $2.6 billion.

‘The two separate warehouse retail facilities will be developed for Cold Storage Singapore (1983) Pte Ltd for its Giant operations, a leading hypermarket operator in Singapore, and for Courts (Singapore) Ltd, a leading furniture and electrical product distributor,’ said A-Reit. It has already signed separate letters of offer with Cold Storage Singapore and Courts Singapore Ltd, detailing its agreement to develop the two individual warehouse retail facilities. Cold Storage and Courts have, in turn, committed to long-term leases.

‘We are pleased to have the opportunity to participate in this new concept to embark on A-Reit’s first two development projects,’ said Tan Ser Ping, CEO of A-Reit’s manager Ascendas-MGM Funds Management Ltd.

A-Reit said it will capitalise the holding cost for the developments to the respective projects and no income will be received during the development period. As a result, the two developments have no impact on A-Reit’s distributable income per unit during the development period. The pro forma financial effect of the completed acquisitions on the distribution per unit for the financial year ended March 31, 2005, would be an additional 0.36 cents per unit.

Both properties are located along Tampines Avenue 10. They were launched under the pilot Warehouse Retail Scheme in April 2004 by the Singapore Economic Development Board. Not less than 60 per cent of the gross floor area of the facility must be used in an industrial or warehousing nature.

Cold Storage is planning its 40,000 sq m facility for its Giant hypermarket operations. It will cost $66 million and is expected to be completed in early 2007. Upon completion, Cold Storage will sign a 29-year lease with A-Reit. The proposed rent is calculated based on a weighted average of retail and warehouse rental rates.

Courts will sign a 10-year lease with A-Reit upon completion of its 20,830 sq m facility in late 2006. The development cost is $55-$62 million.

Source : Business Times - 25 Jan 2006