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GUOCOLAND has sold the 20-storey Robinson Centre for $145 million to a fund managed by Keppel Land’s subsidiary, Alpha Investment Partners. The acquisition price for the property, which stands on a site with remaining lease of about 90 years, works out to $1,115 psf of net lettable area. GuocoLand has entered an arrangement to manage the building, with a net lettable area of about 130,000 sq ft, for two years on an exclusive basis, and has given the buyer a property income undertaking for a yield of 4.5 per cent for the period.

GuocoLand said the divestment is expected to result in a net gain of $17 million. Based on its latest audited consolidated accounts as at June 30, 2005, the sale is expected to result in an increase in earnings per share from 11.54 cents to 14.12 cents. The sale will not materially affect the group’s net tangible assets per share. GuocoLand, controlled by Malaysian tycoon Quek Leng Chan, said the cash proceeds will be redeployed to the group’s property development and investment activities.

Source : Business Times - 17 Jun 2006

Madam Wong’s may have been a hot joint for clubbers but the property on Mohamed Sultan Road did not live up to the expectations of its owners in a widely-watched auction yesterday.

The two Peranakan shophouses with a combined floor area of 21,382 sq ft were offered at an auction yesterday with an opening price of $11.3 million - a figure close to the value of the property. The reserve price worked out to be about $528 per square foot.

The shophouses are owned by Cliffview Holdings, which counts veteran nightclub operator Peter Wong as one of its directors.

A counter offer of $8.5 million was the only bid for the property at yesterday’s auction. However, as this was far below the reserve price, the property was withdrawn from the auction.

When contacted, auctioneer Shaun Poh from DTZ Debenham Tie Leung said that aside from the counter offer received, another investor had approached DTZ following the auction, with a better offer and negotiations will be taking place. But he was unable to reveal the identity of either potential investor.

Barely a year ago, Sultan Of Swing and Shanghai Sally closed their doors for good. Between then and now, five other clubs which Mr Wong used to own have also folded. Madam Wong’s Bar is the last that remains.

An employee at Madam Wong’s said that business has been slow since places like Ministry of Sound (MOS) bumped it off the hot-spot charts. Weekdays have become karaoke nights - with neither flashing disco lights nor loud, lively music that used to characterise the place.

Weekend crowds have also thinned, as much of the younger set has been drawn to Club Momo, Zouk and Phuture, just to name a few.

However, Madam Wong’s does have its share of loyal patrons such as Hazlina, 26, who loves the environment and friendly service there. Hazlina, to whom Madam Wong’s is like a second home, is ‘dampened by the idea’ of the bar closing.

As things progress, it is highly likely that the bash being held tonight at Madam Wong’s could be valedictory as negotiations for the sale of the property continue.

The final decision on whether to keep Madam Wong’s will eventually rest with the new owner.

Source : Business Times - 16 Jun 2006

Reserve-list site at Unity St ‘triggered’ just 3 weeks after site was available

THE Urban Redevelopment Authority (URA) yesterday said it has accepted a successful application from a developer for a reserve-list hotel site at the corner of Unity Street and Clemenceau Avenue to be put up for tender.

The developer has committed to bid at least $25 million during the tender for the 99-year leasehold site. This price works out to $210 per square foot of potential gross floor area.

A hotel consultant estimates that assuming the developer is looking to build a hotel with 190 rooms on the site, the $25 million minimum price translates to a breakeven cost of about $300,000 per hotel room. This reflects an estimated net yield of 6 to 8 per cent. Of course, it remains to be seen just how aggressive the bidding will be during the tender for the site. The tender is slated for launch in about two weeks and will close about eight weeks later.

The Urban Redevelopment Authority’s (URA) announcement yesterday that the reserve-list site had been triggered for tender is just within three weeks of the site being made available for application - the shortest period since the government introduced the reserve-list system in June 2001.

The previous record of five weeks was held for the Somerset Central site, whose tender closes in August.

Sites on the state’s reserve list are released for tender only if there is a successful application by a developer with an undertaking to offer at least a minimum bid which is acceptable to the state.

Some property industry observers reckon the quick release of the Unity Street hotel site reflects improving investor interest in the Singapore hotel market on the back of bullish sentiment fuelled by the government’s award last month of the the Marina Bay Integrated Resort site to Las Vegas Sands.

The Singapore Tourism Board’s 2015 vision announced in January last year aims to double visitor arrivals to 17 million and triple tourism receipts to $30 billion by 2015.

URA said the Unity Street site is the first hotel plot to be triggered for sale from the government reserve list since the sale of a plot at Bras Basah Road/North Bridge Road, next to Carlton Hotel, in January last year.

The Unity Street hotel site is one of three hotel plots on the Government’s reserve list for the first half of this year. There’s still no news of a successful application of a hotel site at Sinaran Drive near Novena MRT Station which has been available for application since April.

The final plot, in the budget hotel/backpacker haunt of Bencoolen Street, will be offered later this month.

Source : Business Times - 13 Jun 2006

Sale of site slated for commercial devt could fetch up to $58m

Riding on the recovery in the property market, Simon Cheong’s SC Global Developments has put up for sale a commercial site it bought last year at the corner of Newton and Thomson roads which some in the market say could fetch around $42 million to $58 million.

If this price is indeed achieved, it would make for a handsome profit given that SC Global bought the 15,490 sq ft freehold site for just $13.5 million in August last year when sentiment was weaker.

Besides the vast improvement in sentiment in the commercial property market, an additional reason for the increase in the site’s value comes from SC Global’s decision to pitch the proposed commercial development for medical suites.

This makes sense given that the Novena area seems to be shaping up as a medical hub with Far East Organization’s Novena Medical Centre coming up and the site’s proximity to Tan Tock Seng Hospital. SC Global’s site - previously used as a Shell petrol station - is also close to Thomson Medical Centre and KK Women’s and Children’s Hospital.

SC Global’s site is currently approved for a 12-storey commercial building with a 3.0 plot ratio (ratio of potential gross floor area to land area). This allows a maximum gross floor area (GFA) of 46,470 sq ft. No development charge (DC) is currently payable.

However, the property group, which is well-known for its upscale residential properties, recently submitted an outline application for a higher plot ratio of 4.2 entailing an 18-storey commercial project with 65,058 sq ft GFA. The latter scheme, if approved, would involve payment of a development charge of nearly $1 million.

SC Global itself has not placed a price tag for the property, which is being marketed by DTZ Debenham Tie Leung by a tender that closes on July 12.

However, by some estimates, the site could fetch about $900 psf of potential gross floor area, inclusive of development charges, if any. This works out to an absolute amount of about $42 million based on the approved redevelopment scheme with 3.0 plot ratio.

Using the proposal for a higher 4.2 plot ratio, the plot’s value translates to a higher figure of $57.6 million using the same $900 psf per plot ratio unit land price.

The breakeven cost for the new freehold project works out to about $1,800 psf to $1,900 psf.

Currently, Far East Organization is said to be selling 99-year leasehold medical suites at its upcoming Novena Medical Centre nearby for about $2,000 psf. The location is set for transformation. Novena Square is being repositioned as a sports and lifestyle mall with a new name of Velocity@Novena. And the Urban Redevelopment Authority will soon launch for tender a residential plot near Novena Medical Centre, which will create more homes in the area.

Across the road, next to SC Global’s site, the owners of units in the four-storey Goldhill Centre are also said to be planning a collective sale and are understood to have submitted a planning application for a commercial redevelopment of their site.

SC Global bought its site last August from Shell Singapore through a tender.

Source : Business Times - 12 Jun 2006

 Value of Hotel Asia, White House Park estimated at $150m

Singapore insurer Asia General Holdings, in which a Japanese group bought a stake earlier this year, is said to be looking for buyers for two of its properties - White House Park Apartments along Stevens Road and Hotel Asia on Scotts Road, said to be together worth nearly $150 million.

Hotel Asia is said to have an indicative valuation of about $125 million, including development charges (DC) for redeveloping the 35,880 sq ft freehold site into a residential project.

This works out to about $830 psf of potential gross floor area including DC, which is estimated at around $23 million.

Sources say the Urban Redevelopment Authority (URA) has approved redeveloping the site into a 30-storey residential project with a 4.2 plot ratio (ratio of potential gross floor area to land area). This would allow a condominium to be built on the site with about 75 units averaging 2,000 sq ft, suggest property market watchers.

Under Master Plan 2003, the site is zoned for hotel use with a 4.2 plot ratio.

White House Park Apartments, a low-rise development with dual frontage to Stevens Road and White House Road, has a freehold land area of nearly 43,000 sq ft. The site now has 14 apartments and five townhouses with a total strata area of around 33,800 sq ft.

Property market watchers reckon the best deal for potential investors would probably be to buy the property and spruce it up.

Based on this scheme, analysts estimate the development could fetch about $600 psf of strata area, or slightly over $20 million.

For investors looking to redevelop the site, the only option would be to build Good Class Bungalows (GCBs) as the site is zoned for that use.

The land area is big enough for just two GCBs. Assuming the site fetches about $400 psf, working out to $17.2 million, the land cost per bungalow would be around $8.5 million, resulting in a breakeven cost of around $11.5 million per bungalow, a property consultant estimated.

‘The group is selling some of its non-core property assets, which makes sense, given that the property market has gone up a fair bit,’ said a source close to the group.

Market watchers also expect the insurance group to be open to selling its other properties like Asia Insurance Building at Finalyson Green and Asia Chambers, at the corner of Cecil and McCallum streets.

Last year, URA approved the group’s proposal to redevelop Asia Chambers into apartments, with commercial use on the ground floor.

The group also owns Cree Court, a four-storey freehold apartment block with a land area of 65,416 sq ft in the GCB area of Dalvey Road. ‘I think they’ll probably stagger the sale of their properties,’ a property consultant suggested.

In April, Japan’s Tokio Marine & Nichido Fire Insurance agreed to buy 14.74 per cent of Asia General Holdings and entered into an option agreement to buy a further 39 per cent.

One of Singapore’s largest private companies, Asia General Holdings (AGH) is the holding company of The Asia Life Assurance Society, The Asia Insurance Company, Asia Life (M) Bhd and Asia Insurance (Malaysia) Bhd. The AGH group has established networks, distribution and coverage of the Singapore and Malaysian life and general insurance markets.

Source : Business Times - 8 Jun 2006