Posts tagged: Cathay Organisation

Jul 21 2009

Premier Centre sold to Fragrance Group

Analysts say group could be eyeing conversion to hotel

 
(SINGAPORE) Another office block has been sold. Premier Centre, a seven-storey property at the corner of Beach Road and Tan Quee Lan Street, changed hands earlier this month for $18 million, or about $1,076 psf based on a strata area of 16,727 sq ft.
Premier Centre stands on a site with a 999-year leasehold tenure starting from January 1827.
Market watchers reckon that buyer Fragrance Group could be eyeing the possibility of converting Premier Centre into a hotel when its existing office leases run out in 2011.
This makes sense given the property’s strategic location near the Downtown Line Bugis MRT Station.
Premier Centre’s existing gross floor area of about 25,600 sq ft exceeds the maximum of about 15,000 sq ft allowed for the site under Master Plan 2008.
‘So it is more feasible to do additions and alterations, as well as to improve the building’s efficiency by squeezing out more usable space – than to tear down the property and redevelop the site,’ says an industry observer.
However, any conversion to hotel use will need approval from the authorities. The site is currently zoned for commercial use.
BT understands that Premier Centre’s seller, a unit of the Hong Leong Group, recently spruced up the building’s interior, including the lobby and common toilets, prior to its sale. The building is currently 85 per cent occupied.
DTZ brokered the sale. Premier Centre was completed in 1992.
Interest in small office blocks costing around $100 million or less has gathered pace.
Recently, Sommerville Development, whose shareholders include Yi Kai Group and Fission Group, bought Aviva Building in Cecil Street and the next-door Cecil House from insurer Aviva for a total of $101 million.
Sommerville also picked up VTB Building in Robinson Road for $71 million last month. Its intention is said to be to redevelop the properties to apartments.
Other office deals transacted recently include Anson House, which was sold for about $85 million, and the freehold Parakou Building, at the Robinson Road/McCallum Street junction, which went for $81.38 million or $1,280 psf of net lettable area.
Parakou Building was bought by a unit of Cathay Organisation, controlled by Choo Meileen.
Source: Business Times, 21 July 2009

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May 18 2009

Cathay unit buys Parakou Building for $81.4 million

Price works out to 36% below what seller paid in 2007

(SINGAPORE) Finally, a price benchmark has been set for a CBD office block in Singapore. Parakou Building, at the corner of Robinson Road and McCallum Street, has changed hands at $81.38 million or $1,280 per square foot of net lettable area, BT understands.

A subsidiary of Cathay Organisation, controlled by Choo Meileen, is believed to be the buyer. Knight Frank is said to have brokered the deal by private treaty. It declined to comment when contacted.

The $81.38 million transacted price for the 16-storey freehold office block is about 36 per cent lower than the $128 million the seller paid for the property two years ago.

Still, the loss for UK fund manager New Star Asset Management Group (which was acquired recently by Henderson Group) would be mitigated substantially by the Singapore dollar’s appreciation relative to the pound over the two years.

The last major office investment sales deal was in June last year when City Developments Ltd sold the 999-year leasehold Commerce Point near Raffles Place MRT Station for $2,200 psf.

There was at least one other smaller deal after that – the $21.5 million sale of Beach Junction at Beach Road in August last year.

The dearth of sales of office blocks since then, in the aftermath of the global financial crisis, has made it hard to price such assets, although rents have clearly fallen.

The average gross monthly Grade A office rental value has fallen about 35 per cent from a high of $18.80 psf in Q2 and Q3 last year to $12.30 psf in Q1 this year, according to CB Richard Ellis figures.

While Parakou Building has sold for 36 per cent below what the seller had paid two years ago, bigger price discounts are expected for larger office towers costing several hundred million dollars or more, because there is less equity around and because of tight bank financing, property agents say.

‘So potentially, based on a returns perspective, the price benchmark might be tested again,’ a senior property consultant said.

Source: Business Times, 18 May 2009

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