K-REIT Asia has bought a 50 per cent stake in an office building in Brisbane, Australia, its first acquisition outside Singapore.

It paid Charter Hall Opportunity Fund No 4 A$166 million (S$206.5 million) for the stake in the Grade A commercial building, the same as its appraised value.

The seller has also signed an income support agreement until 2012 that will top up the difference between actual cashflows and a guaranteed net cashflow of A$12.8 million a year.

The building at 275 George Street was completed in April last year and comprises 40,317 sq m of office space over 30 floors plus 1,431 sq m of retail space. K-Reit said it was 99.4 per cent leased and two Australian corporations, Telstra and Queensland Gas, have 10-year leases.

Ng Hsueh Ling, chief executive of K-Reit Asia Management, said the acquisition will add 10 per cent to K-Reit Asia’s asset size, or from $2.1 billion to $2.3 billion. The building is expected to be immediately yield accretive and has a weighted average lease expiry (WALE) of 9.4 years. This will extend the WALE of K-Reit’s present portfolio to 5.9 years from 5.2 years.

K-Reit said the purchase will be funded entirely by proceeds from its recent rights issue, which will improve aggregate leverage from 27.7 per cent as at Dec 31 to 25.2 per cent after the deal is completed this quarter.

K-Reit recently reported distributable income for the fourth quarter increased 11.4 per cent to $19.4 million. For the full year, distributable income to unitholders increased 21.1 per cent to $70.5 million. It said then it was considering buying a stake in Marina Bay Financial Centre from parent Keppel Land.

Source: Business Times, 1 Feb 2010

DEVELOPMENT of the planned Underground Science City (USC) at Kent Ridge is gaining momentum, with JTC Corporation now embarking on a thorough soil and rock investigation of the site.

This follows its award of a tender in December to a Swiss-Singapore consortium to get detailed designs and cost estimates for the project which spans a 20-hectare geological formation below Science Parks 1, 2 and 3 as well as Kent Ridge Park.

The consortium of Amberg Engineering and Jurong Consultants has a 13-month timeline to complete that study, with the results expected in January next year, a JTC spokeswoman said.

Amberg specialises in underground construction like road and railway tunnels and has built caverns for the Swiss Army and Swiss Air Force while Jurong Consultants is part of the Jurong International Group.

Jurong International said on its website that the study will “look into the potential of underground caverns for research laboratories and data centres. It will reassess the maximum build size for the cavern complex as well as other environmental and demographic factors”.

The JTC spokewoman said that the latest soil and rock study – a tender for which was called on Friday – is part of ongoing feasibility studies for the project. “It is still at conceptual stage at this point,” she added.

The soil and rock investigation is expected to take about four months.

The appointed consultant-contractor will undertake detailed studies like rock core drillings to obtain data down to approximately 150 metres, and to investigate the quality and properties of bedrock at the site.

The consultant will also need to have specialists such as an engineering geologist or geotechnical engineer, an experienced drilling specialist and a geophysicist for the study.

Additionally, the JTC tender also specified that the contractor should have a geologist who has good knowledge and 10 years? experience in local geology in Singapore or similar soil/rock formations like the Jurong Formation.

With land getting scarce, the USC is one of several underground projects which Singapore is now pursuing.

Source: Business Times, 1 Feb 2010

I REFER to last Saturday’s Forum Online letter, ‘Is there a code for property agents?’ by Miss Yusnita A. Raby.

PropNex Realty does not distinguish between agents who specialise in sale, purchase or rental transactions of residential or commercial property, when it comes to certification. The reason is that we feel that all agents, regardless of the area in which they specialise, need to be familiar with industry policies, practices and ethical guidelines.

The Common Examination for Salespersons and Common Examination for House Agents have been previously approved as acceptable entry-level qualifications for new agents, which is why PropNex Realty strongly encourages all agents to attain these certifications.

With regard to the minimal educational qualifications for new agents, we understand that the authorities are currently working on setting a standard to be applied.

Finally, concerning the employment of agents who have not declared commissions or submitted transactions before, there is currently no central registry that tracks such errant behaviour.

We hope that the new regulations to be announced by the authorities will implement such a central registry for greater monitoring of agents who have acted unprofessionally.

On our part, PropNex Realty has terminated the services of many agents who have not submitted transactions before. We do not condone such unethical behaviour and will not allow an agent to join us if we knew he had previously failed to submit a transaction.

If Miss Raby or any other members of the public have evidence of PropNex agents engaging in such unethical practices, we invite them to contact us via our website at www.propnex.com and help us eradicate unprofessionalism in the industry.

Adam Tan
Corporate Communications Manager
PropNex Realty (subsidiary of P & N Holdings)

Source: Straits Times, 1 Feb 2010