A UNIT of Frasers Centrepoint has bought the prime StarHub Centre in Cuppage Road for a residential and commercial project.

Owners CapitaCommercial Trust (CCT) confirmed months of speculation yesterday when it announced that the 10-storey building had been awarded to FCL Crystal for $380 million through a tender process.

The price is 42.5 per cent – or $113.3 million – more than its valuation of $266.7 million at the end of June by CB Richard Ellis, the statement said.

CCT said the Urban Redevelopment Authority ruled in January that the property near Orchard Road could be designated for residential use, but 20 to 40 per cent of the gross floor area must be retained for commercial use.

Approval has also been given for a new 99-year lease for the project, subject to certain conditions.

CCT said the property had reached its ‘optimal stage of life cycle as an office building’. With its focus mainly in the office sector, it said the best option to unlock maximum value was to sell the building to another party for potential redevelopment.

‘The manager is of the view that CCT should not participate, whether solely or on a joint venture basis, in the redevelopment of the property into a predominantly residential project and expose CCT to undue residential development and market risks,’ the real estate investment trust added.

Frasers Centrepoint said the deal would lift its land bank to 2.2 million square feet.

‘With its strategic location, the (site) has great potential for a high-end mixed residential and retail development,’ said Frasers Centrepoint chief executive Lim Ee Seng.

Source: Straits Times, 17 Jul 2010

Sales picking up after quiet June with World Cup, school holidays

SALES have stayed fairly hot at a new condominium in Bukit Timah with 114 flats in the 172-unit estate now sold in just over a week, including 24 of the 30 pricey penthouses.

Ten apartments were snapped up at the official launch of the Terrene yesterday following the 104 that have been sold since a private preview started on July 8, UOL Group said.

The 999-year leasehold condo in Jalan Jurong Kechil is priced at an average of $1,250 per sq ft (psf) for a typical unit, with a one-bedroom flat starting from $719,000.

The penthouses are priced from $1.7 million for a three-bedroom unit to $2.79 million for a five-bedder.

Terrene is a 50-50 joint venture between UOL and La Salle Asia Investment Management.

The newly released 368 Thomson has also done well.

City Developments (CDL) said yesterday that it has sold more than 90 per cent of the 157-unit freehold condo in Thomson Road since it started a private preview on July 8.

The Straits Times understands that 144 units have been sold, leaving a balance of 13 units.

Last Friday, CDL announced that it had sold 96 out of 120 launched units. Prices were about $1,350 psf, or from $918,000 for a one-plus-study unit to $4.4 million for a five-bedroom penthouse.

Since then, the developer has released more units with prices 2 to 3 per cent higher.

The market for new private homes quietened last month with buyers distracted by the euro zone debt crisis, school holidays and the World Cup. A certain amount of price resistance had also set in.

But this month will be a slightly busier month, say property consultants.

Hong Leong Holdings said in a statement yesterday that it will launch the 99-year leasehold The Scala at the end of this month.

The Scala, which is in Serangoon Avenue 3 and near the Circle Line’s Lorong Chuan MRT station, will have 468 units. It has one- to four-bedroom units ranging from 474 sq ft to 2,142 sq ft.

Hong Leong said the condo will have seven pavilions, each designed to give residents a different interactive experience. One will be an Italian pavilion with a wood-fired oven for residents to make their own pizzas.

More property launches can certainly be expected from September, after the traditionally quiet Hungry Ghost Month, experts say.

CDL said its 642-unit, joint venture condo in Pasir Ris will be released in the third quarter.

Source: Straits Times, 17 Jul 2010

HDB to provide $6m for shops to spruce up, promote themselves

ABOUT 3,400 Housing Board shops in 35 neighbourhoods or town centres will get a chance to spruce up or promote themselves – and perhaps stave off competition from swanky new heartland malls.

The shops will be included in the third phase of the Housing Board’s Revitalisation of Shops scheme.

The 35 places included in the latest phase range from Chai Chee Neighbourhood Centre to Toa Payoh Lorong 7 Neighbourhood Centre.

Under this phase, the HDB will provide about $6 million that can be used to upgrade common areas where the shops are located or to carry out promotional activities, or both.

The co-funding scheme was started in 2007. In the first two phases, the HDB spent $17 million, benefiting more than 3,000 shops in 34 areas.

There are 14,600 HDB shops islandwide.

Stores that are in areas not yet included in the scheme will also get a boost: The HDB will give those that want to upgrade a half-month rent-free period, subject to some conditions. This means the stores can use the money they save on rent to add extra fittings and other equipment to make themselves more attractive.

The latest moves were announced by Senior Minister of State for National Development Grace Fu at an HDB retail seminar held at the HDB Hub auditorium in Toa Payoh yesterday.

Speaking in Mandarin to 400 representatives from HDB shops, she noted that a recent survey had shown more positive business sentiment and greater awareness of government assistance schemes.

But, she said, shops have a role to play too, and should keep up with customer demands and improve business management to succeed.

‘You should continually improve your knowledge of retail practices and open your minds to new ways to create value and boost productivity.’

HDB shops have been in the spotlight recently, with many complaining of falling business in the face of competition from new heartland malls, as well as an ‘invasion’ of big retail chains into neighbourhoods.

Yesterday, Mr Yeo Hiang Meng, the president of the Federation of Merchants’ Associations Singapore, which represents about 30 per cent of HDB shops islandwide through member associations, said it has received feedback that shops on the revitalisation scheme have seen business improve by 10 per cent to 30 per cent.

Mr Yeo, who runs a goldsmith and jewellery shop in Toa Payoh Central, said heartland shops had a distinctive character and could even be a way of attracting tourists. He said: ‘Shopping in the heartland is a unique feature of Singapore.’

Yesterday, the HDB also launched a mobile version of its where2shop@HDB website – which was started last year for people to get quick information about HDB shops and their products – for easier navigation on mobile phones. It can be accessed at www.mobile.hdb.gov.sg

Source: Straits Times, 17 Jul 2010

W Hotels Worldwide and Indonesian company Dua Cahaya Anugrah (DCA) launched The Residences at W Bali-Seminyak yesterday at St Regis Hotel Singapore.

The 79-unit villa-style development is next to the 158-room W Bali Hotel.

The 79 units consist of 65 one-bedroom units of 2,422 to 3,068 sq ft, 10 two-bedroom units of 3,789 sq ft and four three-bedroom villas of 6,708 to 7,669 sq ft.

Prices range between US$605 and US$800 per sq ft – which equates to about US$1.5 million for the most affordable villa.

According to a DCA spokesperson, this is about a 5 to 10 per cent premium to other projects around Seminyak.

The development is freehold for Indonesian citizens and leasehold for foreigners, based on the current ownership laws in Indonesia. DCA lawyers are available to advise foreigners on the types of ownership available to foreigners.

The project, which was launched in Indonesia about three months ago, is almost 60 per cent sold. Most of the buyers are the Indonesians. Reportedly, three one-bedroom villas have already been sold to Singaporeans.

A catch is the concept of ownership – the villas will form part of W Hotel’s rental pool and will be looked after by the hotel’s management team for 48 weeks of the year. The villa owners will be allocated exclusive access to their property for four weeks a year.

At a news conference yesterday, DCA said owners can expect an internal rate of return in excess of 5 per cent from their property’s rental income.

The development was designed by SCDA Architects, which has done numerous high-end developments in Singapore.

There will be a public viewing at St Regis Hotel over the weekend, from 10am to 7pm.

W Hotel Worldwide is a brand in the Starwood stable, which includes St Regis, Sheraton, Le Meridien and Westin.

The brand was started in 1998 with the opening of W New York. Since then it has expanded rapidly. Currently, Starwood is the only hotel chain with a dedicated ‘residential’ team that helps developers with projects.

In Singapore, City Developments has launched W Residences on Sentosa. In May, two units were sold at a median price of $2,800 psf.

Source: Business Times, 17 Jul 2010

Other projects include Hong Leong’s launch of The Scala in Serangoon

A NEW development is about to inject some freshness to the historic area of Chinatown. The Tang Group of Companies will be building Dorsett Regency Hotel and Dorsett Residences at a 99-year hotel site at New Bridge Road.

Agents have started gathering interest for the 68-unit Dorsett Residences, and they say it could be previewed at the end of this month. The six-storey project will have one, two and two-plus-one bedroom units, starting from 484 sq ft in size. Prices are said to be in the region of $1,700-$1,900 psf.

According to agents, residents will be able to tap on concierge services from Dorsett Regency Hotel next door.

Tang Group’s website provides more details. It says the 10-storey hotel will have 285 rooms, a swimming pool and a landscape deck. The entire hotel-residential development will have a direct link to Outram Park MRT station.

Tang Group is headed by Dennis Chiu, of the Chiu family that used to run the former Tang Dynasty City in Jurong.

The firm bagged the hotel site through a state tender which closed in September last year. Zoning guidelines allow developers to set aside as much as 40 per cent of a hotel site’s total floor area for commercial and residential uses.

Cushman & Wakefield managing director Donald Han believes that Dorsett Residences should be popular, given its location. He suggests that medical tourists who frequent Singapore General Hospital nearby may consider buying units for their own occupation when they are in town.

He adds that for developers, hotels are a longer term investment compared with homes. Developers would be able to recover some capital more quickly by incorporating and selling residences in hotel sites.

Another residential project that is coming up is The Scala. Hong Leong Holdings plans to launch the 99-year leasehold 468-unit development at Serangoon Avenue 3 at the end of the month.

There will be one to four-bedders, ranging from 474 to 2142 sq ft in size. Hong Leong has yet to determine the number of units and prices for the launch. Based on caveats lodged, units at Chiltern Park nearby were sold at $735-761 psf in May.

‘The Scala was designed with the family in mind,’ said Hong Leong’s sales and marketing head Betsy Chng. The project will have seven pavillions, providing facilities such as a wood-fired pizza oven for residents.

Over at Cairnhill Road, private previews of CapitaLand’s Urban Resort Condominium have started since May. According to Urban Redevelopment Authority data, 12 units have been sold. Of these, four units changed hands in June at a median price of $2,733 psf.

Source: Business Times, 17 Jul 2010

Pauline Goh will continue in her current role as managing director for Singapore

CB Richard Ellis (CBRE) has named Pauline Goh its chief executive for South-east Asia from July 1.

Ms Goh, 51, will also continue in her current role as managing director for Singapore.

CBRE’s managing directors for Malaysia, Thailand, Vietnam, Cambodia, Indonesia and the Philippines will now report to her.

Market watchers say her promotion to South-east Asia chief will allow Asia president and chief executive Chris Brooke to focus more on developing business in China, where CBRE has opened a string of offices in the past two years.

Mr Brooke said yesterday: ‘As part of our ongoing strategy in Asia, we are looking to develop our business in Singapore into a hub operation to support our activities throughout Southeast Asia. In line with this strategy, within her newly expanded role, Pauline will adopt overall responsibility for our business activities in both Singapore and the remainder of South-east Asia.’

Ms Goh said: ‘We are operating in a very challenging and exciting environment in Asia. The South-east Asian markets present a significant opportunity for CB Richard Ellis and we are looking both to grow the traditional components of our business as well as develop enhanced and expanded capabilities to meet the increasingly sophisticated needs of our clients.

‘At the same time, we are committed to protecting our market leadership in Singapore in relation to the mature lines of business – commercial leasing, investment sales, residential sales and leasing, valuation and advisory services and property management.’

Ms Goh, who is married and has four teenaged children, holds a BSc in estate management from National University of Singapore. She joined CBRE in 1983 as an executive in its industrial and commercial marketing department.

Two years later, she moved to the commercial leasing team and built up a team of top professional negotiators. In 1993 she took over the management of the residential department, before being appointed managing director of the Singapore office in 2005.

CBRE said yesterday that under her stewardship, the Singapore office has performed to a consistently high standard, achieving strong revenue and high profit margins on a regular basis, as well as a leadership position in the local market.

Over the years, Ms Goh has been directly involved in a number of major property investment deals, many office and residential projects and assignments undertaken by the company, besides helping to manage the business and the people that make it up.

She helped secure the largest independent private property deal so far in Singapore – the sale of Temasek Tower in 2007 for $1.039 billion.

Source: Business Times, 17 Jul 2010

THE Housing & Development Board yesterday unveiled more initiatives to help HDB shops, including the selection of 35 sites for batch three of its Revitalisation of Shops (ROS) scheme.

ROS, which kicked off in November 2007 and has since covered more than 3,000 shops, provides part-funding for shopkeepers to upgrade and carry out promotions. Participating shopkeepers have reported 10-20 per cent increases in sales.

The budget for the scheme this year is an estimated $6 million. Besides helping through ROS, HDB will grant half-month rent-free periods to tenants who renovate their premises. The sum of $2 million a year has been set aside for this initiative, which is expected to benefit more than 6,000 HDB shops.

Besides announcing the moves yesterday at a retail seminar, HDB also used the occasion to launch a Where2shop@HDB Mobile website. Unveiled last year to showcase HDB shops in 148 locations, Where2Shop can now be accessed by consumers through mobile devices. Extra features, such as tenant profiles and details of promotions, have been added to the site.

Also at the seminar, Grace Fu, Senior Minister of State for National Development and Education, shared findings from a 2009 business expectations survey – 62 per cent of shopkeepers surveyed took the initiative to improve their businesses, up from 52 per cent in 2008, she said.

About 2,800 HDB shopkeepers islandwide took part in the survey, which was carried out in September and October last year.

Source: Business Times, 17 Jul 2010

Plans for former Specialists’ Shopping Centre and Hotel Phoenix site include 500 hotel rooms, 224,000 sq ft of retail space

A NEW shopping and hotel destination is set to take the Orchard shopping belt by storm in 2013. On offer are 500 hotel rooms and about 224,000 sq ft of retail space, as well as two open plazas for busking and artist performances.

This is the plan unveiled by United Engineers Ltd during the groundbreaking ceremony yesterday for the site that previously housed the Specialists’ Shopping Centre and Hotel Phoenix complex – which has a gross floor area (GFA) of 538,196 sq ft. The development is designed by internationally-renowned architectural firm Tange Associates.

The property group was appointed by OCBC to build the shopping cum hotel destination in June through an arrangement that allows OCBC to retain ownership of the prime Orchard Road property after the redevelopment is complete.

Directly opposite this refurbished shopping and lifestyle destination is the 218 Orchard Road site (previously the home of Orchard Emerald). Like its sister sitting on the other side of the road, the site, which occupies a GFA of 104,410 sq ft, will be developed into an 11-storey building with two basement floors. About 37,674 sq ft of space will be devoted to offices, while 29,063 sq ft will be retail space. The site will be developed by OCBC’s insurance subsidiary Great Eastern Life, and UEL will act as project manager.

To provide a seamless way for pedestrians to make their way to and from the two destinations and to the Somerset train station, a glass pedestrian bridge linking the development to the property sitting opposite – formerly Orchard Emerald – is also in the works by UEL. It will also be constructing an underpass that will help to link the hotel cum retail property to the Orchard Emerald site. The redevelopment of the Specialists’ Shopping Centre site, along with the construction of the glass bridge and underpass, is slated for completion in the second quarter of 2013.

OCBC said that the total development costs for both properties is about $700 million, with about $150 million to be spent on the old Orchard Emerald site.

Said Jackson Yap, group managing director and chief executive of UEL on the former Specialists’ Centre development: ‘Its unique architecture that straddles both sides of Orchard Road, and with the glass overhead bridge, will offer a new postcard view of Orchard Road.

‘With the glass overhead bridge, the Orchard Road Christmas Light-up will also have new decorative possibilities. We strive to create a new focal point in Orchard Road that will be buzzing with activity and excitement.’

Source: Business Times, 17 Jul 2010

ASCENDAS Real Estate Investment Trust (A-Reit) has posted a 3.5 per cent rise in distributable income to $63.1 million for its first quarter ended June 30, up from $61 million a year earlier.

The period saw net property income climb 8.2 per cent year-on- year to $87.3 million and gross revenue up 10.9 per cent at $113.6 million.

But distribution per unit (DPU) for Q1 – which had a bigger unit base – fell 6.9 per cent to 3.37 cents, from 3.62 cents a year ago. The Q1 DPU was up 3.4 per cent compared with a proforma DPU of 3.26 cents a year ago, which included new units issued in the August 2009 placement, in lieu of base management fee in December 2009 and June 2010 and for payment of acquisition fee in June 2010.

Net property income growth could have been higher if not for higher operating expenses attributed to the enlarged portfolio, higher utilities expenses, and the end of land rent rebates given by the government in 2009.

‘We are pleased to commence the financial year with a 10.9 per cent growth in gross revenue contributed mainly by the larger portfolio base from a year ago,’ said Tan Ser Ping, chief executive officer of A-Reit’s manager, Ascendas Funds Management (S) Limited.

Occupancy rate for the portfolio in Q1 has remained stable at 95.6 per cent.

Also, rental reversion on lease renewal continued to be positive for the Business & Science Parks and Hi-Tech Industrial properties in the first quarter.

Jonathan Ng from DMG & Partners Research said: ‘We maintain our FY11 DPU forecast of 13.7 cents as dividends are well supported by the long-term leases.’

A-Reit is currently developing a partial built-to-suit business park facility in Changi Business Park for Citibank.

As at June 30, 2010, A-Reit’s portfolio consists of 92 properties and a total asset value of about $4.9 billion.

A-Reit’s manager aims to at least maintain the previous financial year’s level of net income for FY2010/11.

The counter closed two cents higher yesterday at $2 per share.

Source: Business Times, 17 Jul 2010

CapitaCommercial Trust will book a net gain of about $109.1m from the divestment

FRASERS Centrepoint Ltd has inked a deal to buy StarHub Centre at Cuppage Road for $380 million from CapitaCommercial Trust (CCT).

CCT will book a net gain of about $109.1 million from the divestment. The transaction price is 42.5 per cent or $113.3 million above the asset’s latest valuation of $266.7 million at June 30, 2010.

CB Richard Ellis brokered the sale of StarHub Centre.

Frasers Centrepoint CEO Lim Ee Seng said that StarHub Centre has ‘great redevelopment potential for a high-end mixed residential and retail development’. The asset will continue to be leased out as an office/retail property until such time as redevelopment options and designs are firmed up by the company, and planning approvals are obtained, Mr Lim added.

The group’s Centrepoint Shopping Centre already has a second-storey link bridge to StarHub Centre and a new project on the StarHub site will better integrate the two properties, market watchers say.

The sale by CCT will provide it with net proceeds of about $375.8 million – after taking into account divestment fee and other related costs – which will provide the trust with greater financial flexibility to pursue other attractive acquisition opportunities and/or to repay debt, the trust’s manager, CapitaCommercial Trust Management Ltd (CCTML) said.

It also revealed that on July 13 it received in-principle approval from Singapore Land Authority (SLA) for a top-up of the StarHub Centre site’s lease to 99 years. The site currently has a balance lease term of about 85 years. However, the lease upgrading premium payable to the state will be determined upon formal application.

In January, Urban Redevelopment Authority granted outline planning permission (OPP) for a change of the site’s use, from pure commercial use currently – to a residential (60-80 per cent of gross floor area or GFA) and commercial use (20-40 per cent of GFA). However, the current gross plot ratio of 4.9+ remains unchanged.

‘After evaluating various asset options and Singapore’s property market conditions, the manager believes that the property has reached its optimal stage of life cycle as an office building. However, as CCT’s focus is mainly in the office sector, the manager is of the view that CCT should not participate, whether solely or on a joint-venture basis, in the redevelopment of the property into a predominantly residential project and expose CCT to undue residential development and market risks.

‘Hence, the manager considers that the best option to unlock the maximum value of the asset for CCT is to divest it to another party for potential redevelopment,’ CCT’s manager said.

It also stressed that the sale to Frasers Centrepoint is not subject to any additional planning or redevelopment approval of any kind being obtained, following the OPP. It is also not a condition of the sale that CCT fulfils the conditions of the in-principle lease upgrade approval from SLA.

CCT also explained the process of picking the buyer.

‘After an exercise to gather formal expressions of interest from a long list of prospective bidders to purchase the property, the sale of the property was conducted by way of a private tender with the parties which had expressed an interest to purchase the property. The purchaser was one of the bidders which offered to purchase the property and whose offer and terms for the purchase (a) did not introduce any new provisions which would give rise to the right of the purchaser to rescind the purchase, thus offering more certainty in the completion of the sale, and (b) met most closely with the requirements of the manager and the trustee,’ CCTML said.

Frasers Centrepoint said the acquisition of StarHub Centre will boost its landbank to 2.2 million square feet.

Source: Business Times, 17 Jul 2010