Source : The Straits Times, Dec 20, 2007
Hike in maintenance fees ranges from 7% to almost 13% and takes effect next month
THE opposition-held Potong Pasir ward is raising its service and conservancy (S&C) charges for the first time in a decade.
Residents there will pay between $2.50 and $8 more a month, depending on the size of their HDB flat.
The increase ranges from 7 per cent to almost 13 per cent, a hike which Potong Pasir MP Chiam See Tong told The Straits Times yesterday is ‘reasonable’.
He said: ‘It is time for an increase because all costs have gone up. We have always told our residents that we will be the last to go up and we have kept that promise.’
The hike, which kicks in next month, comes two months after the same charges were raised in Hougang, the other opposition-held ward in Singapore.
Hougang MP Low Thia Khiang, who heads the Workers’ Party, increased charges by between 3 per cent and almost 16 per cent.
The PAP-held constituencies raised their charges in 2004, by between 2 and 6 per cent. Their town councils manage several wards collectively and the fees differ among them.
Mr Chiam, leader of the Singapore People’s Party, said in his letter to residents that the Potong Pasir Town Council had tried its ‘level best’ not to heap more burden on families by charging more.
‘But the town council can no longer absorb the increasing maintenance costs, which in the last 10 years have considerably increased,’ he said.
Despite the hike, Potong Pasir residents still pay less than those in Hougang.
For instance, four-roomers in Potong Pasir pay $49.50, two dollars less.
Mr Chiam, who heads the town council, acknowledged that some residents would not be happy with the higher charges. But he believes the unhappiness can be contained.
‘Some residents have even asked me why we have not raised the charges for so long!’ he said.
Resident Rama Shankar Singh, 44, who lives in a four-room flat in Potong Pasir Avenue 3, said the increase is not significant.
Added the civil servant: ‘There’s not much difference. As long as the estate is properly maintained, it’s fine. What else can we do, right?’
Thursday, December 20, 2007
Rents, Occupancy For Industrial Space Reach Record Levels
Source : The Straits Times, Dec 20, 2007
Supply crunch for prime office space boosts demand for these properties
INDUSTRIAL property - long the ugly duckling of the real estate sector - is reaping sky-rocketing rents, thanks to the shortage of office space in prime areas.
This squeeze is forcing firms that would traditionally occupy space in or near the Central Business District to set up shop elsewhere - in premises they would not normally consider.
It has led to a brisk year for industrial property, especially hightech space, with occupancy up and rents going through the roof.
‘Rents have appreciated more than 25 per cent across the board this year,’ said Knight Frank’s industrial department head, Mr Lim Kien Kim. ‘We are now moving nearer the 1996 peak, in terms of rents and capital values.’
Average monthly rents for high-tech space, or high quality space suitable for businesses, has risen 37.5 per cent this year to $2.75 per sq ft (psf).
The average occupancy for high-tech space rose to 92.8 per cent from 91.1 per cent last year, said CB Richard Ellis (CBRE).
The consultancy’s director for industrial and logistic services, Mr Bernard Goh, said: ‘The increase in rents and occupancy rates for high-tech space is likely to continue as large injections of office and high-tech stock are not expected until after 2009.’
Business parks have also become more popular with traditional office tenants. Citigroup, for one, has said it will lease two facilities at Changi Business Park for its back-office operations.
The average occupancy rate for business parks will have risen 5 percentage points to around 89 per cent by the end of the year.
Banks, especially, are moving back-room operations to suburban industrial locations. Deutsche Bank, HSBC and American Express have all taken space at The Comtech in Alexandra Terrace.
‘It is not sustainable for banks to pay $15 to $20 psf for prime space,’ said Mr Donald Han of Cushman & Wakefield. ‘High-tech industrial space or business parks are going for $3 to $4 psf.’
Even humble factory space has plenty of suitors. Average monthly rents rose to $1.45 psf for ground floor units and $1.20 psf for upper floor ones - up 20 cents psf from last year, said CBRE.
Rents for ground-floor warehouses hit $1.45 psf, from $1.25 psf a year ago. In the third quarter, warehouse occupancy passed 90 per cent for the first time.
Developers have responded to the buoyant sector by snapping up land. Several business park sites were awarded this year and the Government has sold 10 industrial plots, up from seven last year.
One site in Commonwealth Drive/Lane was sold for a record $171 psf of potential gross floor area. Prices of the other nine plots ranged from $23 psf to $72 psf.
Next year, rents and occupancy rates for all industrial space should continue growing.
‘The effects of the United States sub-prime woes might impact demand for industrial space in the short to medium term but overall, manufacturers are expected to continue investing in Singapore,’ said CBRE’s Mr Goh.
Mr Lim of Knight Frank expects rents to grow by 10 to 15 per cent next year.
Supply crunch for prime office space boosts demand for these properties
INDUSTRIAL property - long the ugly duckling of the real estate sector - is reaping sky-rocketing rents, thanks to the shortage of office space in prime areas.
This squeeze is forcing firms that would traditionally occupy space in or near the Central Business District to set up shop elsewhere - in premises they would not normally consider.
It has led to a brisk year for industrial property, especially hightech space, with occupancy up and rents going through the roof.
‘Rents have appreciated more than 25 per cent across the board this year,’ said Knight Frank’s industrial department head, Mr Lim Kien Kim. ‘We are now moving nearer the 1996 peak, in terms of rents and capital values.’
Average monthly rents for high-tech space, or high quality space suitable for businesses, has risen 37.5 per cent this year to $2.75 per sq ft (psf).
The average occupancy for high-tech space rose to 92.8 per cent from 91.1 per cent last year, said CB Richard Ellis (CBRE).
The consultancy’s director for industrial and logistic services, Mr Bernard Goh, said: ‘The increase in rents and occupancy rates for high-tech space is likely to continue as large injections of office and high-tech stock are not expected until after 2009.’
Business parks have also become more popular with traditional office tenants. Citigroup, for one, has said it will lease two facilities at Changi Business Park for its back-office operations.
The average occupancy rate for business parks will have risen 5 percentage points to around 89 per cent by the end of the year.
Banks, especially, are moving back-room operations to suburban industrial locations. Deutsche Bank, HSBC and American Express have all taken space at The Comtech in Alexandra Terrace.
‘It is not sustainable for banks to pay $15 to $20 psf for prime space,’ said Mr Donald Han of Cushman & Wakefield. ‘High-tech industrial space or business parks are going for $3 to $4 psf.’
Even humble factory space has plenty of suitors. Average monthly rents rose to $1.45 psf for ground floor units and $1.20 psf for upper floor ones - up 20 cents psf from last year, said CBRE.
Rents for ground-floor warehouses hit $1.45 psf, from $1.25 psf a year ago. In the third quarter, warehouse occupancy passed 90 per cent for the first time.
Developers have responded to the buoyant sector by snapping up land. Several business park sites were awarded this year and the Government has sold 10 industrial plots, up from seven last year.
One site in Commonwealth Drive/Lane was sold for a record $171 psf of potential gross floor area. Prices of the other nine plots ranged from $23 psf to $72 psf.
Next year, rents and occupancy rates for all industrial space should continue growing.
‘The effects of the United States sub-prime woes might impact demand for industrial space in the short to medium term but overall, manufacturers are expected to continue investing in Singapore,’ said CBRE’s Mr Goh.
Mr Lim of Knight Frank expects rents to grow by 10 to 15 per cent next year.
Record Year For The Industrial Property Market
Source : The Business Times, Thursday, December 20, 2007
Rents and occupancy levels improve for all industrial space in 2007: CBRE report
THIS has been a record-breaking year for the industrial property market with rents and occupancy levels improving for all industrial space this year, CB Richard Ellis (CBRE) says in its latest report on the sector.
The increases reflect continued strong demand, the property firm said yesterday. The year also saw the award of several business park sites, the launch of a fourth industrial real estate investment trust (Reit) and 10 industrial sites awarded to developers and manufacturers. In addition, Ascendas also announced that its Singapore Science Park will undergo a $400 million renovation.
In the fourth quarter, average monthly rent for high-tech space rose 7.8 per cent quarter-on-quarter and 37.5 per cent year-on-year to $2.75 per square foot (psf). The rental surge can be attributed to increased demand from traditional office tenants seeking high-tech space as an alternative because of the steep rise in office rents, said CBRE.
The average occupancy rate for high-tech space has risen to 92.8 per cent now, from 91.1 per cent at the end of last year. The average occupancy rate for business parks has grown by 5.0 percentage points year-on-year to 89.0 per cent, CBRE’s data showed.
‘The increase in rents and occupancy rates for high-tech space is likely to continue as large injections of office and high-tech stock are not expected until after 2009,’ said Bernard Goh, CBRE’s director for industrial and logistic services.
Likewise, average monthly rents for factory space also increased over the year - albeit at a slower pace. Rents for factories rose five cents psf every quarter for the entire 2007. This was an improvement over 2006 when rents remained at $1.25 psf for ground floor units and $1.00 psf for upper floor units throughout the year. Occupancy rates also improved gradually during the year.
Rentals and occupancy rates for warehouse space also increased during the year.
‘The increase in rent and occupancy rates for factories and warehouses was due to better economic conditions in Singapore and Asia,’ Mr Goh said. Many international companies have recently turned their sights to this region on the back of Asia’s growth, and Singapore’s strategic location and pro-business environment have made the city-state a choice location for many companies, he said.
Rents and occupancy rates for all industrial space - especially high-tech buildings and business & science parks - are expected to continue growing in 2008, CBRE said. ‘The effects of the recent US sub-prime woes might impact demand for industrial space in the short-medium term but overall, manufacturers are expected to continue investing in Singapore and so demand for industrial space will still remain healthy,’ the report says.
Rents and occupancy levels improve for all industrial space in 2007: CBRE report
THIS has been a record-breaking year for the industrial property market with rents and occupancy levels improving for all industrial space this year, CB Richard Ellis (CBRE) says in its latest report on the sector.
The increases reflect continued strong demand, the property firm said yesterday. The year also saw the award of several business park sites, the launch of a fourth industrial real estate investment trust (Reit) and 10 industrial sites awarded to developers and manufacturers. In addition, Ascendas also announced that its Singapore Science Park will undergo a $400 million renovation.
In the fourth quarter, average monthly rent for high-tech space rose 7.8 per cent quarter-on-quarter and 37.5 per cent year-on-year to $2.75 per square foot (psf). The rental surge can be attributed to increased demand from traditional office tenants seeking high-tech space as an alternative because of the steep rise in office rents, said CBRE.
The average occupancy rate for high-tech space has risen to 92.8 per cent now, from 91.1 per cent at the end of last year. The average occupancy rate for business parks has grown by 5.0 percentage points year-on-year to 89.0 per cent, CBRE’s data showed.
‘The increase in rents and occupancy rates for high-tech space is likely to continue as large injections of office and high-tech stock are not expected until after 2009,’ said Bernard Goh, CBRE’s director for industrial and logistic services.
Likewise, average monthly rents for factory space also increased over the year - albeit at a slower pace. Rents for factories rose five cents psf every quarter for the entire 2007. This was an improvement over 2006 when rents remained at $1.25 psf for ground floor units and $1.00 psf for upper floor units throughout the year. Occupancy rates also improved gradually during the year.
Rentals and occupancy rates for warehouse space also increased during the year.
‘The increase in rent and occupancy rates for factories and warehouses was due to better economic conditions in Singapore and Asia,’ Mr Goh said. Many international companies have recently turned their sights to this region on the back of Asia’s growth, and Singapore’s strategic location and pro-business environment have made the city-state a choice location for many companies, he said.
Rents and occupancy rates for all industrial space - especially high-tech buildings and business & science parks - are expected to continue growing in 2008, CBRE said. ‘The effects of the recent US sub-prime woes might impact demand for industrial space in the short-medium term but overall, manufacturers are expected to continue investing in Singapore and so demand for industrial space will still remain healthy,’ the report says.
HDB Demand-Supply Imbalance A Part Of Property Cycle
Source : The Straits Times, Dec 20, 2007
THE phrase 'getting a home is like striking the lottery' is used to describe the Singapore housing scene these days - and it is no wonder.
If the Housing Board's (HDB's) latest sale is anything to go by, it is getting harder to hit the jackpot.
A sale that closed this week for just 316 flats attracted an unprecedented 5,147 applications - and this was for traditionally less attractive estates Hougang, Punggol and Sengkang.
This translates into a one-in-16 chance of securing a flat - far worse than the one-in-four chance for the same estates in June.
In HDB's August sale of 354 flats in popular, mature estates, the odds were an even more unlikely 29-to-one.
But just what lies at the heart of the current shortage? Is the high demand for flats genuine? Is it supported by strong economic fundamentals? Or is it just a manifestation of Singapore's infamous 'kiasu-ism' (the colloquial expression for 'being afraid to lose out')?
Housing experts seem to think it is a bit of both.
Singapore's buoyant economy is expected to grow 8 per cent this year - and 6 per cent next year.
Rising wages and good job prospects fuel the desire for homes. And with 2008 tipped as an auspicious year for marriage, the number of couples rushing to get on the property ladder is increasing.
Then there is the collective sale phenomenon that gripped Singapore this year - with year-to-date deals topping $13 billion. The wrecking ball has displaced many home owners, causing a supply shortage and a spike in demand for homes.
Singapore's spectacular property bull run has also driven private property prices up, pushing cash- rich home owners turned home seekers into the HDB resale market. These buyers have been setting headline prices, driving resale prices up and in turn pricing young couples out of the market.
Suddenly, new HDB homes seem so attractive, almost regardless of location. Couples who previously never considered less central estates such as Punggol, Sengkang, or Woodlands are thinking twice.
Associate Professor Tu Yong of the National University of Singapore's department of real estate blames collective sales for 'distorting the market'. Still, she reckons that as long as the economy continues to perform, demand should be genuine - and sustainable.
Property agency PropNex chief executive Mohamed Ismail agrees, but adds there could be some 'froth' in this current high demand. Many fear prices will move higher so they are jumping on the bandwagon. Whether they really need a new home or can afford to wait, is another issue, he says.
Ultimately, there is no short-term solution - supply requires time to respond. With demand rising unexpectedly fast this year, supply has no chance of keeping up, says Prof Tu. And the painful truth for some couples is: They will just have to wait it out.
Even as many continue to call for immediate solutions, the Government has to be careful to avoid a future supply glut, which usually comes on the heels of high demand.
This might seem ludicrous now, but it happened during the last property peak of 1996 when long queues for flats vanished just as HDB laid the last brick in the massive batch of flats couples had demanded. This oversupply, of tens of thousands of flats, took years to clear and suppressed resale prices.
HDB's current build-to-order system - which builds flats only when a certain percentage of buyers commit - mitigates this risk, but newly-weds argue it is not the ideal solution as the flats will be ready only in four to five years.
For HDB's part, it is not enough to just lift supply but to do so in the right place, at the right time. Flats are still available in Jurong West, for example, but couples shun the area, even more than they do Punggol and Sengkang, due to its farflung location, proximity to industrial estates and perceived lack of vibrancy.
Granted, there is a limit to the number of flats that can be built in more popular areas. But perhaps a closer look at demand patterns will prevent supply and demand mismatches in the future.
Meanwhile, there have been suggestions that Central Provident Fund monies be used for the cash needed upfront in the resale market. But that itself will have larger implications which will require lengthy studies - and will not solve the apparent problem.
Ultimately, demand and supply imbalances are part and parcel of property cycles. The Government is right to ensure there will not be a supply glut repeat - but newly-weds should also learn to understand the market and ride out these demand and supply kinks.
Perhaps it is in their best interests to wait for a clearer market balance before making any decision to commit to a long-term home.
THE phrase 'getting a home is like striking the lottery' is used to describe the Singapore housing scene these days - and it is no wonder.
If the Housing Board's (HDB's) latest sale is anything to go by, it is getting harder to hit the jackpot.A sale that closed this week for just 316 flats attracted an unprecedented 5,147 applications - and this was for traditionally less attractive estates Hougang, Punggol and Sengkang.
This translates into a one-in-16 chance of securing a flat - far worse than the one-in-four chance for the same estates in June.
In HDB's August sale of 354 flats in popular, mature estates, the odds were an even more unlikely 29-to-one.
But just what lies at the heart of the current shortage? Is the high demand for flats genuine? Is it supported by strong economic fundamentals? Or is it just a manifestation of Singapore's infamous 'kiasu-ism' (the colloquial expression for 'being afraid to lose out')?
Housing experts seem to think it is a bit of both.
Singapore's buoyant economy is expected to grow 8 per cent this year - and 6 per cent next year.
Rising wages and good job prospects fuel the desire for homes. And with 2008 tipped as an auspicious year for marriage, the number of couples rushing to get on the property ladder is increasing.
Then there is the collective sale phenomenon that gripped Singapore this year - with year-to-date deals topping $13 billion. The wrecking ball has displaced many home owners, causing a supply shortage and a spike in demand for homes.
Singapore's spectacular property bull run has also driven private property prices up, pushing cash- rich home owners turned home seekers into the HDB resale market. These buyers have been setting headline prices, driving resale prices up and in turn pricing young couples out of the market.
Suddenly, new HDB homes seem so attractive, almost regardless of location. Couples who previously never considered less central estates such as Punggol, Sengkang, or Woodlands are thinking twice.
Associate Professor Tu Yong of the National University of Singapore's department of real estate blames collective sales for 'distorting the market'. Still, she reckons that as long as the economy continues to perform, demand should be genuine - and sustainable.
Property agency PropNex chief executive Mohamed Ismail agrees, but adds there could be some 'froth' in this current high demand. Many fear prices will move higher so they are jumping on the bandwagon. Whether they really need a new home or can afford to wait, is another issue, he says.
Ultimately, there is no short-term solution - supply requires time to respond. With demand rising unexpectedly fast this year, supply has no chance of keeping up, says Prof Tu. And the painful truth for some couples is: They will just have to wait it out.
Even as many continue to call for immediate solutions, the Government has to be careful to avoid a future supply glut, which usually comes on the heels of high demand.
This might seem ludicrous now, but it happened during the last property peak of 1996 when long queues for flats vanished just as HDB laid the last brick in the massive batch of flats couples had demanded. This oversupply, of tens of thousands of flats, took years to clear and suppressed resale prices.
HDB's current build-to-order system - which builds flats only when a certain percentage of buyers commit - mitigates this risk, but newly-weds argue it is not the ideal solution as the flats will be ready only in four to five years.
For HDB's part, it is not enough to just lift supply but to do so in the right place, at the right time. Flats are still available in Jurong West, for example, but couples shun the area, even more than they do Punggol and Sengkang, due to its farflung location, proximity to industrial estates and perceived lack of vibrancy.
Granted, there is a limit to the number of flats that can be built in more popular areas. But perhaps a closer look at demand patterns will prevent supply and demand mismatches in the future.
Meanwhile, there have been suggestions that Central Provident Fund monies be used for the cash needed upfront in the resale market. But that itself will have larger implications which will require lengthy studies - and will not solve the apparent problem.
Ultimately, demand and supply imbalances are part and parcel of property cycles. The Government is right to ensure there will not be a supply glut repeat - but newly-weds should also learn to understand the market and ride out these demand and supply kinks.
Perhaps it is in their best interests to wait for a clearer market balance before making any decision to commit to a long-term home.
DTZ Head Sees UK Property Readjustment
Source : The Business Times, December 20, 2007
(LONDON) The British real estate industry is in danger of talking up a deeper market correction than is warranted, Robert Peto, chairman of property services firm DTZ said on Tuesday.
'Clearly, we are in the middle of a massive readjustment,' Mr Peto said, referring to a record 4 per cent slump in commercial property capital values in November. 'But the unusually swift speed of this means we will reach a clearing price for UK commercial property much more quickly, and the recovery can begin,' he said.
The property market veteran told Reuters in an interview that valuers were re-rating the asset class at a surprising pace and those revaluations had already whetted the investment appetite of equity-rich sovereign investors and pension funds poised to re-enter the market.
'The sharp correction is a good thing and increases probability of a 5-6-month downturn, instead of a 5-6-year one,' said Mr Peto.
He said positive market fundamentals such as strong tenant demand had also been overlooked, since the real estate investment market went into hibernation because the industry tended to exaggerate weakness in times of market stress.
Mr Peto also said talk of a hefty spike in property industry redundancies in 2008 was premature. 'DTZ has not made any forecasts on reduction in head counts across the industry, because our experience is that when you start making those sorts of predictions, they precipitate,' he said.
'We need to be cognisant that we're accelerating very quickly towards that clearing price and it's far too early to say jobs will need to be cut,' said Mr Peto. -- Reuters
(LONDON) The British real estate industry is in danger of talking up a deeper market correction than is warranted, Robert Peto, chairman of property services firm DTZ said on Tuesday.
'Clearly, we are in the middle of a massive readjustment,' Mr Peto said, referring to a record 4 per cent slump in commercial property capital values in November. 'But the unusually swift speed of this means we will reach a clearing price for UK commercial property much more quickly, and the recovery can begin,' he said.
The property market veteran told Reuters in an interview that valuers were re-rating the asset class at a surprising pace and those revaluations had already whetted the investment appetite of equity-rich sovereign investors and pension funds poised to re-enter the market.
'The sharp correction is a good thing and increases probability of a 5-6-month downturn, instead of a 5-6-year one,' said Mr Peto.
He said positive market fundamentals such as strong tenant demand had also been overlooked, since the real estate investment market went into hibernation because the industry tended to exaggerate weakness in times of market stress.
Mr Peto also said talk of a hefty spike in property industry redundancies in 2008 was premature. 'DTZ has not made any forecasts on reduction in head counts across the industry, because our experience is that when you start making those sorts of predictions, they precipitate,' he said.
'We need to be cognisant that we're accelerating very quickly towards that clearing price and it's far too early to say jobs will need to be cut,' said Mr Peto. -- Reuters
One Year On, Anson House Sold Again At 73% Profit
Source : The Business Times, December 20, 2007
It's December and Anson House is changing hands again - for a much heftier price.
Hot property: GE Real Estate has sold Anson House to a private property fund managed by Australia's Macquarie Bank for $129.5m. This works out to $1,701 psf of the building's net lettable area.
GE Real Estate has sold it to a private property fund managed by Australia's Macquarie Bank for $129.5 million - about 73 per cent more than what it paid for the 13-storey office block last December.
The price paid by the Macquarie-managed fund works out to $1,701 per square foot of the building's existing net lettable area (NLA) of 76,127 sq ft. This is slightly higher than the 72,122 sq ft NLA reported earlier as the building's efficiency has been improved - for instance, by converting some of the common areas to lettable space.
The latest sale was brokered by Jones Lang LaSalle's Asia Capital Markets Group and shows that office blocks continue to be traded by foreign institutional investors.
Based on current leases in the building, the $129.5 million reflects an initial net yield of about 3.6 per cent, but this is set to increase with about half of the building's NLA coming up for lease renewals by end-2009.
The 13-storey building, completed nine years ago, includes about 5,300 sq ft NLA of retail space on the ground floor. Anson House also has 98 carpark lots. It stands on a site with a remaining lease of about 89 years. Last year's sale of the building to GE Real Estate was by a company owned by former Singapore Land chairman SP Tao and his Indonesian partner, Mackmoor Pte Ltd.
Nearby, 78 Shenton Way was sold recently for $650.78 million to Germany's Commerz Grundbesitz Investmentgesellschaft (CGI) group. This works out to $1,857 psf based on a total NLA of about 350,000 sq ft, inclusive of six levels of new offices that are being built above the carpark podium by the seller, a joint venture between Credit Suisse and CLSA funds.
The deal is said to include income support as well as a return on the new office extension while it is being built amounting to about $16 million in total to be paid by the seller to the buyer.
Excluding this sum, the effective price being paid by CGI works out to about $635 million or around $1,814 psf. The property is on a site with a balance lease term of about 75 years.
It's December and Anson House is changing hands again - for a much heftier price.
Hot property: GE Real Estate has sold Anson House to a private property fund managed by Australia's Macquarie Bank for $129.5m. This works out to $1,701 psf of the building's net lettable area.GE Real Estate has sold it to a private property fund managed by Australia's Macquarie Bank for $129.5 million - about 73 per cent more than what it paid for the 13-storey office block last December.
The price paid by the Macquarie-managed fund works out to $1,701 per square foot of the building's existing net lettable area (NLA) of 76,127 sq ft. This is slightly higher than the 72,122 sq ft NLA reported earlier as the building's efficiency has been improved - for instance, by converting some of the common areas to lettable space.
The latest sale was brokered by Jones Lang LaSalle's Asia Capital Markets Group and shows that office blocks continue to be traded by foreign institutional investors.
Based on current leases in the building, the $129.5 million reflects an initial net yield of about 3.6 per cent, but this is set to increase with about half of the building's NLA coming up for lease renewals by end-2009.
The 13-storey building, completed nine years ago, includes about 5,300 sq ft NLA of retail space on the ground floor. Anson House also has 98 carpark lots. It stands on a site with a remaining lease of about 89 years. Last year's sale of the building to GE Real Estate was by a company owned by former Singapore Land chairman SP Tao and his Indonesian partner, Mackmoor Pte Ltd.
Nearby, 78 Shenton Way was sold recently for $650.78 million to Germany's Commerz Grundbesitz Investmentgesellschaft (CGI) group. This works out to $1,857 psf based on a total NLA of about 350,000 sq ft, inclusive of six levels of new offices that are being built above the carpark podium by the seller, a joint venture between Credit Suisse and CLSA funds.
The deal is said to include income support as well as a return on the new office extension while it is being built amounting to about $16 million in total to be paid by the seller to the buyer.
Excluding this sum, the effective price being paid by CGI works out to about $635 million or around $1,814 psf. The property is on a site with a balance lease term of about 75 years.