30 September 2019
Mapletree trust to buy $1.55b business park in Pasir Panjang
The Straits Times, 28 Sep 2019, Sat
Mapletree Commercial Trust (MCT) is proposing to buy a business park in Pasir Panjang at an agreed property value of $1.55 billion from Heliconia Realty, a direct wholly owned subsidiary of Mapletree Investments, MCT’s sponsor.
If completed, this could count as one of the largest acquisitions by a Singapore real estate investment trust (S-Reit) this year.
S-Reits have in recent weeks been on an acquisition binge with billion-dollar purchases, amid a lower-for-longer interest rate environment.
Ren Ci’s third nursing home to be at Woodlands Health Campus
The Straits Times, 29 Sep 2019, Sun
Ren Ci Hospital will operate a third nursing home by 2022, managing more than 330 beds and a senior care centre for 100 elderly people at an upcoming health campus in Woodlands.
This will increase its total capacity by almost 35 per cent, to 1,300 beds.
Ren Ci chairman Chua Thian Poh announced the expansion plans at a charity gala dinner yesterday to celebrate its 25th anniversary.
Turf Club looks beyond racing for revamp
The Straits Times, 30 Sep 2019, Mon
By Melissa Heng
Singapore’s only horse-racing club is looking to expand beyond being a racecourse to becoming a lifestyle destination with recreational facilities for the whole family.
The 177-year-old Singapore Turf Club (STC) in Kranji sits on 133ha of land, which is about the size of 166 football fields. The race track alone is about 34ha.
The Tote Board, which governs the STC, issued a request for information (RFI) last Monday to seek ideas on how to transform the club into an integrated leisure destination. This could include themed attractions, community parks, accommodation and retail spaces.
A Tote Board spokesman told The Straits Times last Friday that the purpose of the RFI is to invite market interests, both locally and internationally, for the project.
The RFI says the board is looking for companies with “design skills and creative practices in architecture, landscape architecture, master planning and urban design, experiential concept master planning and design, parks and open space design and transport planning”.
The RFI, which will close on Nov 4, also makes clear that the racecourse will not be scrapped. “While the racecourse will continue to operate, the plan is not to promote horse-racing activities, but to re-imagine how the racecourse land and its existing facilities can be rationalised, replanned and optimised such that the remainder of the site can be redeveloped into an integrated and extraordinary leisure destination with unique offerings and attractions.”
Plans to transform the club into a lifestyle destination first surfaced in 2017 when STC chief executive Chong Boo Ching took charge of the club amid declining finances. In the last decade, the STC’s annual gaming revenues fell from $2 billion to $1.2 billion.
Industry experts said it was about time the club took concrete steps to change and that possible attractions could include a riding school, a farmer’s market, rock climbing facilities or a local version of Bangkok’s Chatuchak market.
Said Dr Harvey Neo, head of programmes at the Lee Kuan Yew Centre for Innovative Cities at Singapore University of Technology and Design: “I’m surprised it has taken them so long to revamp. The turf club is a highly under-utilised space. It’s only really active during the weekends and other times it is just dead space that is not optimised.”Races are held on selected Fridays, Sundays and public holidays of each month. Guests must be 18 years old and above to enter the racecourse on race days.
Dr Neo suggested the club could capitalise on the crowds of people who are attracted to existing nature-themed attractions in the area, including Sungei Buloh Wetland Reserve, the Kranji marshes and nature trail, and the Singapore Zoo.
“I’m thinking maybe there could be a riding school or other outdoor sporting activities like rock climbing. That would be attractive to children and families,” he said.
Mr Chew Kian Beng, course chair for the diploma in hospitality and tourism management at Temasek Polytechnic’s School of Business, suggested that the space could be used as a marketplace to support local entrepreneurs. “This could be done by charging minimally so that young entrepreneurs can pursue their passions. Something like Chatuchak market in Bangkok.”
But the experts also said that the club could find it difficult to shed its current image while trying to rebrand itself. Said Dr Neo: “One of the challenges is that the races are on the weekends and this is when the club would also want to attract families. So they would have to make a clear distinction between the gambling area, where those under 18 would not be able to enter, and the other areas for all ages.”
Ms Regina Yeo, adjunct senior lecturer of marketing at the National University of Singapore’s Business School, said: “The perception now is that the Turf Club has nothing exciting for families or young people. It is not a place that comes to mind as a destination venue when friends want to meet and catch up.”
But Dr Neo felt this could be changed with the right marketing.
Mapletree Commercial Trust to buy business park for S$1.55b
The Business Times, 28 Sep 2019, Sat
By Fiona Lam
MAPLETREE Commercial Trust (MCT) is proposing to buy a business park in Pasir Panjang at an agreed property value of S$1.55 billion from Heliconia Realty, a direct wholly-owned subsidiary of its sponsor Mapletree Investments.
If completed, this could count as one of the largest acquisitions by a Singapore real estate investment trust (S-Reit) this year. S-Reits have in recent weeks been on an acquisition binge with billion-dollar purchases, amid a lower-for-longer interest rate environment.
MCT said on Friday that its trustee and a subsidiary, 80 Alexandra Pte Ltd, have entered into a conditional share purchase agreement for the proposed acquisition of the property through the purchase of shares of Mapletree Business City Pte Ltd.
The property comprises Mapletree Business City (Phase 2) (MBC II) located at 40, 50, 60, 70 and 80 Pasir Panjang Road, as well as the common premises at 10, 20 and 30 Pasir Panjang Road.
It has a total net lettable area (NLA) of 1.2 million square feet (sq ft) and comprises four blocks of business park space as well as the common carpark, multi-purpose hall, retail area and common property of Mapletree Business City Development (MBCD).
The 2.8-hectare property is a premium campus-style workplace, with eco-friendly features and a comprehensive suite of recreational and lifestyle amenities. Its tenants include multinational corporations such as Google, Covidien and Pfizer.
The acquisition will consolidate MCT’s ownership over the entire development of MBCD, which also comprises Mapletree Business City (Phase 1) (MBC I), a four-block office and business park complex at 10, 20, and 30 Pasir Panjang Road acquired by the trustee from the sponsor in 2016.
For the proposed acquisition, the agreed property value of S$1.55 billion was arrived at after taking into account two independent valuations of the property by CBRE and Savills Valuation and Professional Services (S).
Including acquisition-related expenses, the total acquisition cost is around S$1.58 billion, which MCT plans to fund through a combination of debt and equity. The equity fundraising may comprise a private placement and a preferential offering, to issue up to 500 million new units in MCT. The balance of the acquisition cost will be funded by drawing down new loan facilities totalling up to S$800 million.
The acquisition is subject to approvals from MCT unitholders at an Oct 15 meeting and a successful equity fundraising. Details, including the issue price of new units, will be announced later.
MBC II had a committed occupancy of 99.4 per cent as at Aug 31. It also has stable and growing cashflows, as 97 per cent of the leases by NLA have average annual rental step-ups of about 2.3 per cent, said MCT’s manager in a bourse filing.
The property is expected to be acquired at a net property income (NPI) yield of about 5 per cent, which is higher than MCT’s existing portfolio’s NPI yield of 4.7 per cent.
Therefore, the proposed acquisition is expected to increase MCT’s pro forma distribution per unit (DPU) and net asset value (NAV) per unit by 4 per cent and 2.2 per cent, respectively.
It will also complete MCT’s control over the entire Alexandra Precinct, which is formed by MBCD and PSA Building, also owned by MCT. The 13.5-hectare Alexandra Precinct is near the central business district.
“This gives MCT greater economies of scale and flexibility in meeting tenant space requirements,” Sharon Lim, chief executive officer of MCT’s manager, said in a statement.
MCT units closed at S$2.34 on Friday, down two cents or 0.8 per cent.
CapitaLand associate buying Fullshare’s office space in Cecil St tower
The Business Times, 30 Sep 2019, Mon
By Kalpana Rashiwala
AN associated company of CapitaLand is buying the office space at the former GSH Plaza in Cecil Street from a fund led by Hongkong-listed Fullshare Holdings in a deal expected to exceed S$500 million.
The building, now known as Plus, is at 20 Cecil Street, beside Republic Plaza.
Sources told The Business Times the price works out to about S$2,320 per square foot, lower than what Nanjing-headquartered Fullshare paid for the space in 2017 to a consortium led by Sam Goi’s Singapore-listed GSH Corporation.
However the loss to the Fullshare fund should be mitigated as the deal is structured to give the seller a share of upside in the asset in future, for instance, if it is sold for a profit.
Plus stands on a site with a remaining leasehold tenure of nearly 69 years. It is near Raffles Place MRT station.
Talk in the market is that the CapitaLand unit making the acquisition counts Switzerland-headquartered private equity firm Partners Group as a stakeholder.
CapitaLand’s interest in its associated company is held through an entity of CapitaLand Asia Partners I, the property giant’s first discretionary real estate equity fund which was announced earlier this year.
Two years ago, the available office units in the then GSH PLaza that Fullshare bought were valued for “at least S$2,900 psf”, based on information made public by the parties then.
However, it is widely believed in industry circles that the effective price for the offices Fullshare acquired was lower, about S$2,600 psf, after factoring in, among other things, the high price of S$6,166 psf (totalling S$75.59 million) at which a member of the GSH-led consortium agreed to buy all 21 retail units in the 28-storey building. Fullshare, helmed by Ji Changqun, subsequently moved its investment in GSH Plaza to a fund in which it is a stakeholder, along with other co-investors.
The retail units – on Levels 1 and 2 and with a total strata area of 12,260 sq ft – were bought by Dennis Leong, a shareholder of niche property developer DB2 Properties. A joint venture between DB2 Properties and listed Vibrant Group held a 35 per cent stake in the consortium, which was led by GSH Corporation with a 51 per cent stake. The remaining 14 per cent was held by Mr Goi’s private investment vehicle TYJ Group.
In 2014, the consortium had acquired the building, then known as Equity Plaza, from Keppel Land and Alpha Investment Partners for S$550 million, and embarked on a major spruce-up costing about S$100 million, with a view to doing strata sales.
Besides the retail units on the lowest two floors, the building has 259 strata office units on Levels 3 to 28 adding up to 283,349 sq ft.
Prior to selling the company, that held the building, to Fullshare in 2017, the GSH-led consortium had already managed to find buyers for some of the strata office units – including the 28th floor, which was sold to GSH and is now where its corporate headquarters are located.
Assuming the remaining strata office space amounts to, say, 230,000 sq ft and based on the S$2,320 psf price, the latest transaction involving the CapitaLand associated company would work out to about S$530 million.
The building has had several names over the years including The Exchange and The Quadrant. It was developed by Straits Steamship Land (the predecessor of Keppel Land) and DBS Land on a 99-year leasehold site that the duo clinched at a state tender in 1989.
DBS Land merged with Pidemco Land to form CapitaLand in 2000; and in 2006, CapitaLand exited the investment.
The latest transaction, involving the CapitaLand associate’s purchase of the strata office space at Plus from the Fullshare fund, will help boost 2019’s tally of investment sales of Singapore office properties.
Even prior to this deal, office transactions of S$10 million and above in the private sector so far this year already totalled S$5.46 billion – exceeding the S$5.24 billion for the whole of last year, based on data from Savills Singapore.
Market watchers say the year should end on an even higher note, with at least one more sizeable transaction in the offing.
BT understands that the sale of Bugis Junction Towers is set to be inked soon. The price is likely to be S$547.5 million, reflecting S$2,200 psf on net lettable area of 248,853 sq ft.
The 15-storey office block is being sold by Keppel Reit to a fund managed by Angelo Gordon, a US-headquartered global alternative investment manger.
Alongside the fund, Singapore-based property investment manager TCRE Partners is expected to take a minority stake in the acquisition.