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JTC Corp yesterday offered a 0.95-hectare plot of land at Serangoon North Avenue 4 for sale through a tender which closes on Dec 28.

The site is being offered on a 60-year lease and has 1.4 maximum gross plot ratio, which means it can be redeveloped into a new project with a maximum gross floor area of 142,527 sq ft. It is zoned for Business 1 use, which covers clean industry, light industry, public utilities, telecoms uses or other public installations for which the authorities do not impose a nuisance buffer greater than 50 metres.

Colliers International managing director Dennis Yeo reckons the site could fetch $50-60 psf of potential gross floor area - reflecting absolute bid amounts of $7.1 million to $8.6 million. These unit land prices come close to the levels fetched for industrial sites in the Ubi location during the market peak in the 1996-1997 period, he added. His basis for predicting strong bids for the latest Serangoon North plot is that it is small with a relatively low plot ratio, so the absolute investment sum is small. This means the plot will appeal both to end users as well as industrial property developers, which should result in more competition for the site. Another attraction of the site is its longer tenure of 60 years - double the 30-year tenure for some industrial sites being offered by the State.

The latest Serangoon North Avenue 4 site is the second of three industrial plots on the confirmed list of the government’s land sales programme for H206. The tender for the first plot, a 30-year leasehold site at Changi North St 1 zoned for Business 2 use, closed on Nov 10. It drew four bids. The highest bidder was Global Orion Properties Ltd, which offered $4.3 million or about $27 psf per plot ratio. The other three bidders were Soilbuild Group Holdings, Eastpoint Development and Mapletree Investments.

Source : Business Times - 18 Nov 2006

It also says asset enhancement is possible for its prime OUB Centre 

Overseas Union Enterprise (OUE) could spend as much as $450 million to do up three of its properties - Meritus Mandarin hotel, office building Overseas Union House, and the adjacent Change Alley Aerial Plaza - chief executive David Lee told BT yesterday, as the property group unveiled new looks for all three developments.

OUE, which is now controlled by Indonesia’s Lippo group and Malaysian tycoon Ananda Krishnan, also said that asset enhancement was possible for its prime OUB Centre at Raffles Place as it could benefit from an increased plot ratio.

At the Meritus Mandarin hotel’s Mandarin Gallery, OUE will spend between $100 million and $200 million to revamp the shopping area into a premier luxury retail mall with an estimated 250,000 sq ft of retail space, up from just 75,000 sq ft at present.

Completion is scheduled for mid-2010, after which rents will be increased, said Dr Lee. Average rental now stands at $9.45 per sq ft per month, with the gallery consistently commanding occupancy rates of over 95 per cent.

Once it is all done up, the gallery will showcase fine luxury global designer labels and will be a unique ‘one-stop’ shopping and dining experience, OUE said.

Elsewhere, Overseas Union House (OUH) will be pulled down, and in its place an 18-story Grade A office tower will emerge, said Dr Lee. Together with a complete refurbishment of Change Alley Aerial Plaza next door, an estimated net lettable area of 400,000 sq ft will be available, he said. The whole project is expected to cost about $250 million.

The target for completion is late 2009. The property, said OUE, will command strong rentals because of tight supply in the office sector until 2010, when the Marina Bay Financial Centre is due to be completed.

The upcoming development in the heart of the central business district has the potential to get even bigger. OUE is one of eight bidders for the Collyer Quay government land site, for which tender results are due before the year’s end.

Both OUH and Change Alley Aerial Plaza will be integrated with Collyer Quay if OUE’s bid is successful, the company said.

Dr Lee said that OUE has not yet decided how it will fund the refurbishment works. OUE’s third quarter results show that as at Sept 30, it had $106.2 million in cash and some $497.9 million of available-for-sale financial assets.

Earlier this month, OUE said it had completed selling its entire stake in United Overseas Bank (UOB) for $376.9 million.

The company’s shares are currently suspended from trading as the free float is less than 10 per cent.

Source : Business Times - 16 Nov 2006

Site is next to plot Lippo bought earlier from OCBC 

LIPPO Group has expanded its presence in the River Valley/Kim Seng area, clinching the freehold Kim Seng Plaza for $132 million in the latest collective sale, BT understands.

It emerged as the highest bidder at the close of a tender yesterday. The tender, handled by Jones Lang LaSalle, is said to have attracted eight bids. Lippo is understood to have pipped City Developments.

The price Lippo is paying reflects a unit land price of $737 per square foot of potential gross floor area (psf ppr), including an estimated $6 million development charge.

This almost matches the $739 psf ppr that Lippo paid for an adjacent freehold site it bought from OCBC early this year. Lippo plans to develop the earlier site into a 230-unit condo, slated for launch in January or February next year.

Lippo is expected to redevelop the Kim Seng Plaza site into a new project with apartments rising from a retail podium block. The development will offer views of the Singapore River.

The 60,400 sq ft Kim Seng Plaza site is zoned for commercial/residential use and has a 3.1 plot ratio, giving it a maximum floor area of 187,200 sq ft. The maximum building height is 35 storeys.

The existing 18-storey Kim Seng Plaza comprises a four-storey podium with shops on the first and second storeys, a 28-lane bowling alley on the fourth storey and apartments from the sixth to 18th storeys of the tower block.

When it launched the tender last month, Jones Lang LaSalle suggested the site could be redeveloped into small office home office (Soho) units, subject to official approval, to capitalise on its central location.

Such a concept would appeal to people who want to work from home and live in a lively neighbourhood with plenty of leisure, recreational and entertainment activities on the doorstep. Kim Seng Plaza is diagonally opposite Allgreen Properties’ Great World City mall and near CityDev’s Grand Copthorne Waterfront Hotel.

CityDev is expected to begin previews this weekend of its 175-unit Tribeca freehold condo next to Grand Copthorne Waterfront Hotel.

Source : Business Times - 16 Nov 2006

Portfolio could be worth up to $3b; meanwhile, firm posts $128m profit 

PROPERTY tycoon Kwek Leng Beng has indicated that he may put all his office properties into a new real estate investment trust (Reit) as early as next year. This portfolio of assets is estimated to be worth up to $3 billion.

This follows months of speculation about Mr Kwek’s plans for the considerable office assets owned by his City Developments (CDL) group, after a deal to sell a package of 11 CDL properties to Suntec Reit fell through last year.

The developer said in August that it had rejected an ‘unsolicited’ offer that valued the bundle of assets at ‘over $200 million’ more than the $788 million initially offered by Suntec Reit.

At that time, CDL also said it was looking into options for these properties that included injecting them into a new Reit or selling them at a later date.

But Mr Kwek indicated yesterday that a new office Reit, rather than a simple divestment, may be the right move for CDL, Singapore’s second-largest developer.

‘Next year we have more leases coming up for renewal, so next year will be the right time for us to think about doing a Reit,’ he told The Straits Times.

Mr Kwek added that if CDL decides to go ahead with the Reit, it is likely to inject all its office properties at the same time. ‘When we want to create a Reit, we will put everything into it, because then we have critical mass.

‘It will be worth at least more than $1 billion and who knows, we may also add the offices owned by our private companies.’

CDL has more than two million sq ft of office space in Singapore - most within the Central Business District - including Republic Plaza, which alone makes up 750,000 sq ft.

ST understands that CDL’s entire office portfolio, which is now enjoying occupancy rates of 92 per cent, could be worth up to $3 billion.

Mr Kwek also said that while the Reit would initially comprise ‘all Singapore assets’, it may ‘acquire more offices in the region and elsewhere’ in time to come.

Separately, CDL yesterday said its third-quarter net profit more than tripled to $128.3 million from $36.4 million a year ago. This was on the back of higher home sales - including St Regis Residences, for which CDL is booking profits for the first time - and the divestment of four hotels to CDL’s newly-launched hotel Reit earlier this year.

The profit surge came despite revenue rising just 13.8 per cent to $665.2 million.

For the first nine months, CDL sold 835 homes for $2 billion, compared with 2,100 units for $1.6 billion for the whole of last year.

Earnings per share jumped to 14.1 cents for the quarter from 4.1 cents a year ago. Net asset value per share inched up to $5.15 as at Sept 30, from $5.12 as at Dec 31.

CDL is proposing a special interim cash dividend of 7.5 cents per share, to be paid out on Dec 27. It will also pay 1.97 cents per preference share on Jan 3 next year.

CDL has at least one more residential launch planned for the year, a freehold 33-storey condominium next to Grand Copthorne Waterfront Hotel.

The 175-unit Tribeca, renamed from The Pharos, is expected to be soft-launched this weekend at about $1,400 per sq ft (psf).

Also in the pipeline is No 1 Shenton Way, which will be launched either later this year or early next year. The 341-unit project is expected to be priced at between $1,400 psf and $1,600 psf.

CDL shares closed unchanged at $11.60 yesterday.

Source : Straits Times - 15 Nov 2006

FRASERS Centrepoint Ltd (FCL) has bought the adjacent Bedok and Changi theatre sites for $40.8 million and plans to develop the leasehold sites into a mall which, when completed, it will pump into its shopping centre trust, Frasers Centrepoint Trust.

The $40.8 million price reflects a unit land price of about $441 per square foot of potential gross floor area inclusive of an estimated $2.9 million development charge for tapping a higher plot ratio, and a land premium payable for buying two adjoining strips of state land that Frasers Centrepoint can buy.

Market watchers reckon the break-even cost for a new mall project on the site could be about $1,100 psf.

Sellers Shaw Brothers (owner of Changi theatre) and Cathay group (which owns the adjacent Bedok theatre) obtained outline planning permission in early August to redevelop the two theatre sites as well as the adjoining state lands into a mixed-use commercial complex with a 3.0 plot ratio, with a total gross floor area of about 133,598 sq ft.

The two theatres, on sites with a remaining lease of about 70 years, have a combined land area of 33,084 sq ft. The two strips of state land can contribute a further 11,448 sq ft in land area.

Knight Frank handled the sale of the Changi and Bedok theatres, through a tender which closed on Oct 30. The tender is said to have attracted three bids, of which Frasers Centrepoint’s offer was the highest. The other two bidders are believed to have been Guthrie and Heeton.

The mall that Frasers Centrepoint Ltd (FCL) will develop on the site will be its first in the eastern part of Singapore. FCL’s CEO Lim Ee Seng said in a statement yesterday: ‘Upon redevelopment, the Bedok sites will increase FCL’s portfolio of quality retail malls under management to eight, extending our reach to the eastern region of Singapore . . . When completed, the retail mall is expected to be injected into Frasers Centrepoint Trust.’

FCL has granted the trust a five-year right of first refusal on completed mall properties in Singapore owned, acquired or developed by FCL.

Christopher Tang, CEO of Frasers Centrepoint Asset Management Ltd, the manager of the trust, said the latest deal demonstrates the ‘merits of the developer-sponsored Reit model’.

Frasers Centrepoint Trust - which was listed on the Singapore Exchange in July and which currently owns three shopping centres on the island - now has ready access to an enlarged acquisition pipeline of malls which includes the future Bedok mall, as well as Northpoint 2 and the existing Centrepoint Shopping Centre units, Mr Tang added.

Source : Business Times - 15 Nov 2006