Six Prudential Tower floors sold for $141m in Singapore

Six Prudential Tower floors sold for $141m in Singapore

Owner Prudential to be paid in units of property fund
By KALPANA RASHIWALA

PRUDENTIAL Assurance Company Singapore is said to have sold six of the seven office floors it owned at Prudential Tower to a property fund for $141 million in exchange for units in the fund. The transacted price works out to just under $2,100 per square foot based on a net lettable area of about 67,000 square feet.

High pitch: Prudential Assurance bought 7 floors in the development in 1996 for $183 million, or $2,200 psf
However, based on a total floor area of about 72,200 sq ft, the $141 million price works out to a lower $1,952 psf.

Prudential Assurance bought seven floors in the development in early 1996 for $183 million, or $2,200 psf, but according to media reports at the time, the psf price was based on a total floor space of 83,000 sq ft. The net lettable area was not reported.

Nevertheless, the price at which Prudential has sold the six floors (the 20th to 25th levels of Prudential Tower) appears to be lower than its 1996 acquisition price, which set a benchmark for office space which held until this June, when 1 Finlayson Green was sold for around $2,650 psf of net lettable area.

Prudential Assurance Co Singapore is said to have sold the six floors to the fund in exchange for units in the fund.

After the latest transaction of the six floors at Prudential Tower, Prudential Assurance is said to be left with the 30th floor of the building.

The buyer of the six floors in the transaction, concluded this August, was the open-ended Asia Property Fund, sponsored by LaSalle Investment Management and PruPIM. Prudential Assurance Co Singapore and PruPIM are part of the Prudential UK group.

‘In terms of a conflict of interest arising from a related-party transaction, LaSalle Investment Management conducted the acquisition process and PruPIM abstained from any voting on the acquisition,’ LaSalle regional director Marc Montanus said when contacted by BT. ‘The pricing was also supported by third-party valuation.’

Discussion on the acquisition is said to have begun 11/2-years ago.

LaSalle and PruPIM yesterday announced the completion of three acquisitions totalling a gross investment of over US$1.4 billion by the Asia Property Fund, including the six floors at Prudential Tower, although the quantum of the Singapore deal was not specified. ‘There is significant potential for the fund to realise immediate value by increasing the existing rents to much higher market levels,’ LaSalle and PruPIM said in their news release.

The other two assets bought were a 50 per cent interest in Westfield Doncaster mall being redeveloped in Melbourne by Westfield Group, and Tennoz First Tower, an A-Grade office block in Tokyo’s Shinagawa ward.
Source : Business Times - 16 Oct 2007

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Singapore URA to woo Mid-East investors at international event

Singapore URA to woo Mid-East investors at international event

It will sell S’pore as destination for real estate investments at Cityscape Dubai
By ARTHUR SIM
THE Urban Redevelopment Authority (URA) will sell Singapore as a destination for real estate investments to Middle East investors at Cityscape Dubai, an international property event.

Exciting times ahead: URA sold a $1.7b Beach Road site to Istithmar Group, El-Ad Group and City Developments
URA director of land administration Choy Chan Pong said that it was important for Singapore to participate in such events. As an example, Mr Choy highlighted the recent sale of a development site at Beach Road to a consortium which included Middle East-based Istithmar Group.

‘URA had met with Istithmar at last year’s Cityscape Dubai and presented them with the exciting investment opportunities we have in Singapore including the prominent Beach Road site,’ Mr Choy said.

The site in question was sold to Istithmar Group, El-Ad Group and City Developments Ltd for $1.7 billion last month.

Mr Choy said: ‘Singapore’s participation in Cityscape Dubai, hence, allows us to meet with potential investors and developers face-to-face, enabling them to better understand what Singapore has to offer.’

A Singapore Pavilion has been set up at the event for the first time.

The public and private sector organisations exhibiting in the Singapore Pavilion include the URA, Singapore Tourism Board (STB), Building and Construction Authority (BCA), Marina Bay Financial Centre, Lend Lease Retail, Ong & Ong Architects and the Singapore Institute of Architects (SIA).

The URA will showcase Marina Bay, an area which has already attracted around $15 billion worth of investments from international developers including the Marina Bay Sands Integrated Resort, prime commercial developments such as One Raffles Quay, Marina Bay Financial Centre as well as high-quality residential developments.

The STB will be showcasing some of the changes and transformation to the tourism landscape, highlighting tourism zones including Orchard Road and the Southern Waterfront.

BCA will exhibit its mission to develop a quality built environment in Singapore. BCA International, a consultancy company by BCA, will also be present to provide multi-disciplinary construction related consultancy to both public and private agencies in the Middle East.

Source : Business Times - 16 Oct 2007

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The Estoril put up for collective sale at $208m

The Estoril put up for collective sale at $208m

No DC payable; price works out to about $1,536 psf per plot ratio
By ARTHUR SIM

THE Estoril on Holland Road has been put up for collective sale, and the indicative price is $208 million.

The Estoril: CBRE estimates that a developer can build about 75 units assuming an average size of 1,800 sq ft each
This works out to about $1,536 per square foot per plot ratio (psf ppr) for the 84,600 square feet site.

Marketed by CB Richard Ellis (CBRE), its executive director of investment, Jeremy Lake, said that no development charge (DC) is payable due to the high development baseline.

He also said that developers would not incur DC to build the additional 10 per cent gross floor area allowable for the provision of balconies.

Currently, there are 40 three-bedroom units and four penthouses on the site. Based on the indicative price, the three-bedroom units will receive $4.32 million each and the penthouses, $8.69 million or $8.78 million.

CBRE estimates that the developer can build about 75 units assuming an average size of 1,800 sq ft each. The estimated breakeven is around $2,000-$2,050 psf.

In July, Tulip Garden, also in the Holland Road area, was sold for $516 million or about $1,018 psf ppr.

A recent CBRE report did note that a ‘cautious mood’ is being felt in the private land sales market due to the global credit tightening, the higher price tags as well as the two rounds of revision to DC rates. Only 24 sites worth a total of $1.96 billion were sold in the third quarter of 2007 compared with 51 sites (worth $6.92 billion) in the previous quarter.

Separately, Colliers International noted that for the first time in at least the last two years, the residential sector did not take the top spot in investment sales in the third quarter.

In its report, Colliers noted that total sales of residential investment properties dived to $2.9 billion or 21.4 per cent of total sales.

‘This reflects a significant 68.3 per cent drop from last quarter’s record $9 billion which accounted for 82.7 per cent of total investment sales in Q2 ‘07,’ it reported. ‘The trend, where developers continued to land bank at record high prices in the previous quarters, was evidently not repeated in this quarter.’

Attention was shifted to bulk purchases of strata residential units, including those at Costa Del Sol, Reflections at Keppel Bay and M21.

Source : Business Times - 16 Oct 2007

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Singapore retail sales up 6.7% in Aug at $2.59b

Singapore retail sales up 6.7% in Aug at $2.59b

By LYNETTE KHOO
THE two percentage-point rise in goods and services tax (GST) has failed to put a dampener on consumer spending, figures for August show.

Shopping on the go: Economists attribute the resilience in consumer spending to rising wages and household wealth on the back of strong economic growth
Retail sales posted a sturdy 6.7 per cent year-on-year growth to $2.59 billion, data released by the Department of Statistics yesterday showed.

This exceeded all estimates in a Bloomberg News survey of 10 economists, where the median forecast was for a 2.6 per cent rise.

Economists attributed the resilience in consumer spending and confidence here - seen in the rebound in retail sales from a 1.7 per cent year-on-year dip in July - to rising wages and household wealth on the back of strong economic growth.

‘It seems that strong fundamentals in the likes of low unemployment, strong wage growth and increasing wealth effects from the property and equity boom are finally seeping their way into consumer spending,’ HSBC economist Prakriti Sofat said.

The largest gains were seen at provision and sundry shops and supermarkets, where sales increased by 16 per cent and 15.4 per cent respectively.

The retail sales index was also bolstered by double-digit sales growth at department stores and petrol stations and in sales of recreation goods - 11.6 per cent, 11.2 per cent and 11 per cent respectively.

All other segments registered year-on-year growth in sales, with the exception of food and beverages, which fell a slight 0.6 per cent and optical goods and books, which contracted by 0.2 per cent.

Excluding motor vehicles, retail sales in August grew a stronger 8 per cent from the preceding year.

Sales were 0.7 per cent up on July, led largely by stronger sales at provision and sundry shops and more motor vehicles being bought.

‘The benefits of stronger (economic) growth also appear to be finally filtering down to the average worker,’ Citi economist Chua Hak Bin said, pointing to average monthly wages based on CPF records, which rose 8.5 per cent year-on-year in the second quarter, the highest rate in seven years.

Total employment grew by an all-time quarterly high of 64,400 in the second quarter, pushing the jobless rate to the lowest in six years, according to the Ministry of Manpower.

‘We expect retail sales to continue growing at a brisk pace, in the high single-digit rate for the rest of the year,’ Mr Chua added.

Mr Sofat noted that while monthly retail sales can be quite volatile, the three-month moving average of year-on-year growth shows a strengthening trend.

‘Looking ahead, we think retail sales will continue to trend higher as households reap benefits of strong wage gains, healthy employment picture and supportive wealth effects,’ he said.

Meanwhile, the catering trade index in August rose 6.4 per cent from a year ago, due largely to higher receipts at restaurants, fast food outlets and other eating places. But it was 0.2 per cent down from July
Source : Business Times - 16 Oct 2007

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Singapore Home sales hit a wall as stock jitters spook buyers

Singapore Home sales hit a wall as stock jitters spook buyers

Fewer launches add to September slowdown but analysts expect pick-up amid new benchmark prices
By UMA SHANKARI
(SINGAPORE) Developer sales of new homes slowed to a crawl in September, hit by stock market jitters caused by sub-prime woes in the US.

Just some 529 new units were sold by developers last month, a sharp drop from the 1,731 units sold in August.

Property analysts said that September’s take-up rate for new homes could be the lowest monthly figure seen over the past four years.

The low sales were also caused, in part, by fewer launches.

Developers launched just 570 units in September, down from 1,885 units in August as many held back projects while waiting for the market to recover.

However, despite the low volume, new benchmark prices for private homes were set in several areas across Singapore - including Sentosa Cove, Boon Lay and science hub one-north - market observers pointed out. This means that genuine demand for homes still exists, they said.

The Urban Redevelopment Authority (URA) released its monthly update on private residential properties yesterday, showing that developer sales of new projects fell sharply last month.

‘The primary sales market was relatively quiet in the month of September,’ said Tay Huey Ying, Colliers International’s director for research and consultancy.

Like other analysts, Ms Tay attributed the low volumes to the global financial market turmoil as well as the traditionally quiet lunar seventh month.

Developers were also holding back projects, both due to market sentiment and because preparations for their launches could not be finished in time, others said.

‘A few developers’ projects have been held back because of contractors being delayed when it comes to getting the showflats ready,’ said Savills Singapore director of marketing and business development Ku Swee Yong.

The largest project launched during the month was the 163-unit Hillcrest Villa, a cluster housing project.

The poor market sentiment also affected sales at Frasers Centrepoint’s Soleil @ Sinaran as more than 10 per cent of buyers did not exercise their options to purchase their chosen units.

URA’s figures for August showed that 394 out of a total of 417 units launched in the development had been sold, but the number sold fell to 352 in September’s data. Frasers Centrepoint confirmed that 42 options were not exercised before their deadlines, but added that 12 of the units involved have since been resold. The total number of units sold in the project climbed to 395 as the market picked up in October, the developer said.

Analysts also noted that two other trends seen in July and August - the decline of speculative activity and the increased demand for mass market homes - continued into September.

‘Subsales of residential properties accounted for only a small 6.8 per cent of all transactions in the month of September compared to 9.4 per cent in August and 15.1 per cent in July,’ said Ms Tay. Subsale transactions are generally thought to be an indication of the level of speculative activity in the property market.

And in line with a recovering mass market, new units priced in the range of $751-$1,000 per square foot (psf) remained the most sought-after in the third quarter, accounting for 36 per cent of all units sold, Colliers analysis shows.

This was followed by units in the next price range of $1,001-$1,500 psf, which made up 26 per cent of all units sold. By contrast, luxury homes priced above $3,000 psf accounted for only 8 per cent of all new units sold in the quarter.

Analysts expect the property market to recover in the last quarter due to genuine buyer demand.

‘Going forward, we expect the sales momentum in the residential market to continue at a healthy pace against a backdrop of a strong economy,’ said Li Hiaw Ho, executive director at CBRE Research.

Source : Business Times - 16 Oct 2007

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Singapore seeking property investments from Mid-East

Singapore seeking property investments from Mid-East

By Tan Hui Yee, Housing Correspondent

SINGAPORE is wooing investments from the Middle East, as companies and individuals from the oil-rich region expand their presence in the Republic.
Government bodies such as the Urban Redevelopment Authority (URA), Singapore Tourism Board and the Building and Construction Authority have joined a host of other groups to showcase what Singapore has to offer at Cityscape Dubai, a major international real estate event starting today.

It will be the first time a Singapore pavilion has been set up at a top international property event in the Middle East.

The URA will speak about Singapore’s strong economic growth in various sectors, including real estate, real estate investment trusts and other investment opportunities.

There are more than 250 Middle East companies operating in Singapore, as well as an increasing number of individuals and equity funds from the region investing in mega development projects in the Republic.

Foreign direct investment from the Middle East grew from $5.8 billion in 2004 to $6.6 billion in 2005, the most recent year for data, according to the Statistics Department.

Based on caveats lodged, individual Middle East investors bought 34 homes worth $76 million in Singapore from 2004 to Sept 28. About 47 per cent of these deals were closed this year.

Meanwhile, Al-Nibras Islamic Real Estate Fund bought 56 homes in the Reflections at Keppel Bay project earlier this year.

The URA attended the Dubai event last year and pitched investment opportunities to investors, including the Istithmar Group. This is owned by Dubai World consortium, whose assets include the famed Palm in Dubai.

Istithmar has now teamed up with Singapore developer City Developments and the North American-based El-Ad Group to develop an office, hotel, retail and residential project worth an estimated $2.7 billion in Beach Road.

The URA said several Middle East investors had also indicated interest in sale sites that the agency has launched.

At the Dubai event, the URA will showcase Marina Bay, Singapore’s future downtown, which has attracted about $15 billion worth of international investment so far.

Other Singapore groups involved in the Singapore pavilion include the Ong & Ong architecture firm and the Singapore Institute of Architects, while upcoming developments Somerset Central and the Marina Bay Financial Centre will also be showcased.
Source : Straits Times - 16 Oct 2007

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