CapitaLand, NUS Sell Hitachi Tower

Source :　The Business Times, January 16, 2008

CAPITALAND has sold its 50 per cent stake in Hitachi Tower for $403.5 million, the property giant said yesterday.

Upon the deal's completion, CapitaLand will recognise a gain of $110.1 million, it said.

The National University of Singapore, which owns the remaining 50 per cent of the Collyer Quay office building, also sold its stake.

The deal took into consideration the agreed value of the 999-year leasehold Hitachi Tower at $811 million, or about $2,900 per square foot (psf) of net lettable area. The consideration was arrived at on a willing-buyer willing-seller basis, CapitaLand said.

The developer did not name the buyer in its filing to the Singapore Exchange, but sources said that the building was bought by a fund linked to Goldman Sachs.

Goldman Sachs bought the next-door Chevron House, formerly known as Caltex House, for $2,780 psf in August last year. Chevron House is on a site that had a remaining lease of 81 years at the time of the transaction.

The 37-storey Hitachi Tower has a net lettable area of around 279,600 square feet. The building had close to 100 per cent occupancy as at Dec 31, 2007, and key tenants include Hitachi Asia and American Express.

Market watchers have said that it makes sense for Goldman to own two adjoining office blocks as it can take advantage of managing them together, as well as look into the possibility of redeveloping both properties collectively.

A Goldman Sachs real estate fund also bought DBS Towers 1 and 2 on Shenton Way in November 2005 for $690 million, or around $800 psf of net lettable area.

Based on CapitaLand's unaudited financial statements for the nine months ended Sept 30, 2007, the group's earnings per share would have increased from 74.4 cents to 78.3 cents assuming that the sale was effected on Jan 1, 2007, the company said.

CapitaLand's shares shed 13 cents to close at a one-year low of $5.62 yesterday amid a broad fall in the Singapore stock market. The company's stock price has dropped some 10.4 per cent since the start of the year.