Real Estate PACA - FINDING EXTRA VALUE IN AUSTRALIA'S OFFICE MARKET - APAC Real Estate
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A PAC
REIT CONSOLIDATION IN SINGAPORE
HINES' CLAIRE THIELKE ON HONG KONG
KEPPEL’S ALPHA IN SEOUL
Real Estate JUNE — JULY 2019
w
FINDING
EXTRA VALUE
IN AUSTRALIA'S
OFFICE MARKET
Contents
4 Feature: Australian offices 12 China news
Investors face extremely CapitaLand sells Shanghai office to discretionary fund
tight yields in Sydney and EC World buys Hangzhou logistics warehouse
Melbourne's CBD office JLL's Jim Yip on Shanghai offices
markets. How do the other
office markets look today?
13 Hong Kong news
Swire Properties, CMBC sell Hong Kong tower
Hong Kong loses Asia Pacific CRE crown to Beijing
6 Feature: Singapore REITs Wang On Group buys Hong Kong asset for US$99m
Singapore's REIT market is
set for further consolidation,
as trusts look to buy each 14 Australia news
other to gain scale and stand Dexus buys Melbourne office for US$1bn
out from the crowd. Savills' Edward Washer on Sydney logistics
Perron buys half share in Sydney mall
16 Japan news
8 Interview: Claire Thielke
Japan Hotel REIT acquires Tokyo hotel
Hines' new Hong Kong
LaSalle Logiport REIT acquires Tokyo, Osaka logistics
head, Claire Thielke, and her
Invesco J-REIT snaps up offices
team have big plans for the
gateway city and the wider
Asia Pacific region.
18 Singapore news
Frasers Centrepoint Trust buys one-third stake in mall
Perennial, investors sell Chinatown Point Mall
10 Feature: Keppel's Alpha in CapitaLand offloads StorHub self-storage business
Seoul
The private fund manager of
Singapore's Keppel Capital 20 Fund and joint venture news
is pursuing more assets in SC Capital raises US$850m for discretionary property fund
the South Korean capital. ESR raises US$630m for Japanese logistics fund
CapitaLand raises US$391m for discretionary equity fund
Issue 1 / June - July 2019 Cover design: Subscribe to our
Phone +61 413 303 475 Katie Cameron weekly newsletter
APAC Real Estate is your Email news@apacrealestate.com Each week we send out
source for Asia Pacific On the cover a round-up of stories
real estate news and Post PO Box 63, This issue's cover from across the region. If
intelligence. It is North Melbourne image is of Melbourne, features news, interviews
independently published VIC 3051 where the CBD office and deep dives about
and free to read Australia vacancy rate has fallen property markets across
at: APACrealestate.com below 4%. the Asia Pacific region.
Join the conversation Twitter: @apacrealestate | facebook.com/apacrealestate | Linkedin.com/company/apac-real-estate
© 2019 APAC Real Estate. All Rights Reserved.
02 APAC Real Estate Jun-Jul 2019
Taking an Asia Pacific view
Real estate is local, the saying goes. However, capital flows In the first edition, we speak with Hines' new Hong Kong,
into real estate continue to become increasingly global. Claire Thielke, about the firm's expansion plans in the
Industry players have outposts in most gateway cities today, region. We check out Australia's various office markets, as
whether they are scouting for new capital sources or yields reach historic lows in Sydney and Melbourne's
undervalued assets. CBDs.
While the US and Europe have long attracted the lion's We also take a look at Singapore's fragmented REIT market
share of institutional real estate investment, Asia pacific and whether a couple of small mergers over the past year
markets are incrementally increasing their share in global are the start of something bigger. And we dive into Alpha
property capital. Investment Partners' recent acquisitions in Seoul.
That's where APAC Real Estate comes in — to track real As this is the first issue, any ideas, tips or feedback would
estate capital flows throughout Asia Pacific, and those be greatly appreciated. You can reach me at
heading into the region. benn@apacrealestate.com.
Benn Dorrington
Editor
APAC Real Estate Jun-Jul 2019 03
AUSTRALIA
Sydney and Melbourne CBD office yields
are getting tight. What else is out there?
Sydney, Australia
In sunny Sydney, companies in the central near and far, driving a 13% increase in CBD for A$240m, reflecting a 4.5% yield.
business district have to think twice before Sydney CBD office market investments to Charter Hall Prime Office Fund’s A$804m
relocating to another workplace in A$7.17bn in 2018, reported advisor acquisition of 10 & 12 Shelley Street was
Australia’s largest office market. That’s Colliers. And the heightened appetite for reportedly completed at a similar yield.
because there has been an office supply assets in both locations have pushed down While limited new supply across both
drought in the CBD that has seen the premium yields to 4.8% in the Sydney markets will keep the pressure on available
vacancy rate fall to 4.1% as of January this CBD and 4.7% in Melbourne’s CBD. space and rents, investors will have to keep
year, the lowest it has been in over a “Yields in Melbourne and Sydney are very an eye on rental growth to ensure some of
decade. tight and there’s a perception that people these deals deliver.
"Sydney
Head south to the country’s second largest are buying at tight yields for the
office market, Melbourne CBD, and the opportunity for further rental growth,”
If you did go hard in the
vacancy rate is even lower at 3.2%. While Grant Nichols, fund manager of Centuria or Melbourne market,
the workspace shortages have proven Metropolitan REIT, told APAC Real
you have to ask what sort of
challenging for businesses looking for new Estate. “There is some very strong rental
rental growth you intend to
digs nearby, the high occupancy rates have growth happening through these markets,
accelerated rental growth for landlords in so arguably you can pay 5% yields and in a achieve because if you’ve paid
recent years. couple of years you get the running yield a very tight yield and you don’t
Prime net effective rents in the Sydney and back up to something more palatable
get that rental growth, you’re
Melbourne CBD’s increased 17.5% and because the rental growth has been so
15% respectively during the year to end- strong.” stuck with a fairly low returning
January 2019, according to advisor Knight
Frank. Years of significant rental gains
Last year, Japanese real estate firm Daibiru
Corporation bought the 275 George Street
asset for quite some time,
Nichols said.
"
have enticed real estate investors from prime office development in Sydney’s
04 APAC Real Estate Jun-Jul 2019
AUSTRALIA
CBD office Overall Vacancy Overall Vacancy Premium Premium investor interest in Australia’s next biggest
markets Rate 1H19 Rate Jan-20 Yields 1H19 Yields Jan-20 office markets, Brisbane and Perth.
These secondary markets are starting to see
Sydney 4.1% 4.4% 4.8% 4.8% the green shoots of an office recovery story
after vacancy rates spiked at 23% in Perth
Melbourne 3.2% 3.4% 4.7% 4.6% CBD and 16% in Brisbane CBD in 2016
and 2017, respectively, according to UBS
Brisbane 13.% 12.5.% 5.3% 5.1%
Asset Management - Real Estate & Private
Perth 18.5% 19.3% 6% 6% Markets.
In a research note, UBS AM-REPM’s
Adelaide 14.2% 14% 6.3% 6.2% Adeline Chan said vacancy rates were now
starting to trend downwards, with rents
Canberra 12.2% 14.6% 6%* 5.9%*
expected to reverse their contractionary
Source: Colliers International / *Grade A space course. “All things considered, Brisbane's
macro story has more legs to stand on than
Perth given the strong population growth
expected as well as the diversified
economic growth drivers, although Perth
appears more attractive from a yield and
After years of growth and yield that will run high capacity trains from the capital value perspective,” Chan wrote.
compression in Australia’s major office outer west suburbs to the outer southeast However, investors should be mindful of
markets, offices markets beyond the CBD via new inner-city underground stations. that the lack of depth and liquidity across
and in other cities are gaining attention. While Melbourne has other long-term the smaller markets in Brisbane and Perth
Beyond the CBD infrastructure projects in the planning do make them a riskier proposition than
Infrastructure and amenities are raising the stages, occupiers are gravitating to metro Sydney and Melbourne.
profile of certain metropolitan and office markets like Richmond and nearby The secondary cities will best suit investors
suburban office markets in Sydney and Cremorne for other reasons. chasing a greater risk tolerance with the
Melbourne. Take the metro office market ability to ride through cycles, while Sydney
of Chatswood, 10km north of Sydney’s and Melbourne, though in the late stages of
CBD, where Centuria Metropolitan REIT the cycle, will remain attractive options for
owns a 9,395 sq.m. office and a quarter investors with a more stable risk profile,
stake in another building. Chan said. Another market to keep in mind
Chatswood prime asset yields range is Adelaide. While the South Australian
between 5.5%-6.25%, while its prime capital has low rents and a CBD vacancy
vacancy rate currently sits below 4%, rate at 13.5%, the city is home to the
according to advisor JLL. However, the Australian government’s A$90bn naval
most exciting development for Chatswood shipbuilding program.
is the $8.3bn newly-opened Sydney Metro Nichols, who has been keeping a close eye
Northwest rail project that will connect the on the Adelaide market after his fund
city’s booming north-western suburbs with bought a 50% stake in the Bendigo &
trains running every four minutes at peak Adelaide Bank headquarters for A$92.3m
times. last year, said the economic flow-on effects
Grant Nichols
The new rail project is the first stage of the of the program were yet to be truly seen in
larger Sydney Metro project, which will Just a few kilometres southeast of the CBD, the city. Finally, Australia's official capital
link up Chatswood to underground stations Richmond and Cremorne have become city, Canberra, has also drawn local and
throughout the CBD and beyond to the innovation hubs, attracting tech companies overseas investor interest in recent months.
southwest by 2024. It will have driverless such as online jobs board SEEK, online Singapore-based SC Capital Partners
trains, the first in the country, and has a real estate portal REA Group and bought the 28,519 sq.m. Finlay Crisp
target capacity of 40,000 passengers per CarSales.com. Centuria’s Nichols said Centre in the capital's civic CBD for
hour, similar to other metro rail systems companies were drawn to the retail A$62m in mid May, with plans for a
worldwide. amenities on offer in those areas as a way A$50m refurbishment. The Centuria
Melbourne is also boosting its public to attract and retain the best talent. Diversified Property Fund then purchased
transport infrastructure, with the Secondary cities the 6,709 sq.m. Optus Centre building in
construction of the A$11bn Metro Tunnel Go further afield and there is growing the CBD for A$35m in late May.
APAC Real Estate Jun-Jul 2019 05
SINGAPORE
Singapore REITs
poised for further
consolidation
Singapore real estate investment trusts announced plans to merge and become one float market cap of less than S$500m and
(REITs) have flourished since the early of the largest diversified REITs in almost 40% of them trade less than S$1m
2000s, however players in the crowded Singapore, with assets totalling S$6.8bn. by value a day, according to Principal.
market are now looking to consolidation to The deal would grow its portfolio to seven Additionally, most REITs need to grow by
stand out from the pack. assets, including the $1.8bn One Raffles acquisition because of limited internal
“Singapore’s success as a hub for REIT Place office and retail complex, the growth in Singapore.
listings has been double edged,” Shern S$1.2bn OUE Bayfront office and retail “A low cost of capital is critical for
Ling Koh, portfolio manager for Principal complex and the S$1.2bn Mandarin acquisitions to be accretive but this is
Global Investors in Singapore, told APAC Orchard Singapore hotel, boosting OUE C- harder to achieve for the smaller listed
Real Estate. “Whilst the number of REITs REIT’s market capitalisation to about SREITs with low trading liquidity,” Koh
listed here has grown to 42 today from just S$2.9bn. “The proposed combination of said. “Mergers help to boost scale and
1 back in 2002, the market has become OUE Commercial Trust (OUECT) and trading liquidity thereby improving the cost
more fragmented in recent years.” OUE Hospitality Trust (OUEHT) is a bold of capital. With scale also comes
Things started to change last year though, step but potentially a necessary one in an diversification - tenant departures tend to
when ESR REIT and Viva Industrial Trust era where ‘big is beautiful’ amongst the disproportionately impact smaller REITs.”
announced they would merge to become Singapore-listed real estate investment Looking more broadly, boosting the
the city-state’s fourth-largest industrial trusts (S-REITs),” analysts led by Mervin number of larger and more liquid REITs
property trust. After the merger was Song at DBS Group Holdings said in a note should attract more institutional capital to
completed in October last year, the at the time. The move to merge will not the market. Koh said local/regional private
enlarged ESR REIT had roughly S$3bn in only lift the company profile for some banking and retail money had dominated
assets made up of 56 properties with a total smaller S-REITs, but should also improve the small cap REIT space so far, however a
gross floor area of more than 1.26m sq.m. portfolio diversification and the cost of broader investor base would likely boost
Then in April this year, OUE Commercial capital. More than a quarter of the REITs overall trading liquidity in the sector.
REIT and OUE Hospitality Trust listed on the Singapore exchange have free It would also improve the chances of
06 APAC Real Estate Jun-Jul 2019
SINGAPORE
ESR REIT Viva ESR REIT
47 properties Industrial Trust (post-merger)
+ =
AUM: S$1.7bn 9 properties 56 properties
Market cap: S$816m AUM: S$1.3bn AUM: c. S$3bn
6th largest 10th largest Market cap: S$1.7bn
industrial S-REIT industrial S-REIT 4th largest
industrial S-REIT
OUE OUE OUE
Commercial Hospitality Commercial Trust
+
Trust Trust (post-merger)
=
4 properties 3 properties 7 properties
AUM: S$1.7bn AUM: S$1.7bn AUM: S$6.8bn
Market cap: S$1.5bn
Market cap: S$1.3bn Market cap: S$2.9bn
11th largest 24th largest Singapore's 8th
S-REIT S-REIT largest REIT
S-REITs gaining inclusion into global pressure,” he said. “We see merger in Sabana REIT and its manager is in line
equity indices and attract even more opportunities in the industrial and with ESR’s long-term strategy of investing
international attention. In the case of the hospitality REITs space, which has a larger in a broad range of real estate investment
OUE merger, the DBS Group analysts proportion of smaller REITs [below vehicles that would provide us with access
argued “a larger and more liquid OUECT- US$1bn in market cap].” to a portfolio of industrial properties in
HT will likely place it on the radar of a Principal’s Koh also expected more various stages of the property life cycle,”
wider pool of institutional investors and noted ESR co-founders and co-CEOs
potentially result in greater broker Jeffrey Shen and Stuart Gibson. Then there
coverage.”
“Singapore’s is the S$11bn merger of Singapore’s
success as a hub
Principal’s Koh added that there is an government-linked companies CapitaLand
for REIT listings
“arbitrage opportunity” between public and and Ascendas-Singbridge that may also
has been
private valuations, with public valuations, prompt M&A activity. "There may also be
double edged”
especially among smaller S-REITs, looking scope for Capitaland and Ascendas-
Shern Ling Koh
relatively cheaper than private valuations, Singbridge related REITs that are in
where cap rates have compressed overlapping sectors to merge given that
significantly. Vijay Natarajan, an analyst at they now all fall under the same parent,”
RHB Research Institute Singapore, said in consolidation to come, particularly in the Koh said. Ascendas-Singbridge owns the
a note that there had been increasing M&A more fragmented industrial REIT space. Ascendas REIT, Ascendas Hospitality
interest among S-REITs, driven by limited Take Hong Kong-headquartered logistics Trust and Ascendas India Trust, while
acquisition options in the local market, property platform ESR, which owns the CapitaLand owns the CapitaLand Mall
favourable REIT market conditions and ESR REIT and took control of logistics- Trust, CapitaLand Commercial Trust,
aspirations to grow larger to better focused Sabana REIT in May after Ascott Residence Trust, CapitaLand Retail
compete. The trend is likely to continue, acquiring a 9.9% interest in the trust and a China Trust and CapitaLand Malaysia Mall
with more smaller REITs feeling the 51% stake in its manager. “The investment Trust.
APAC Real Estate Jun-Jul 2019 07
HONG KONG
Hines’ Claire Thielke on value-add
opportunities in Hong Kong
US real estate firm Hines is seeking out what we call the ‘Hines Alpha.’” property management activities. In fact, the
opportunities to wield its value-add While Hines is arguably best known as an firm has sponsored almost 60 investment
capabilities in Hong Kong, as it maps out office developer, the firm has notched up funds, on top of numerous one-off vehicles,
its Asia Pacific expansion plans from the experience across most real estate asset totalling US$51.2bn of equity since it was
financial capital. The US$120.6bn privately classes, in addition to investment, asset and founded in 1957.
owned business opened its first Hong Kong “Another opportunity that excites us about
office earlier this year, appointing former Hong Kong and the platform here is the
Hines Investment Management COO Claire opportunity to partner with property
Thielke to lead the new team as managing holders on joint venture redevelopments or
director. provide third-party services, such as
“As a global firm, one of our differentiators development management,” the MD said.
is that we can really look across the “Part of the reason these partnerships can
spectrum of our own coverage and look at be so compelling is that they tend to work
where there are trends or changes well when you have long-time generational
underway or taking hold in one market and landlords, of which there are many in Hong
not in others,” Thielke told APAC Real Kong.”
Estate. “We are particularly enthusiastic The firm sees opportunities to work with
about the value-add space and asset local landlords and deploy the latest
repositioning where we can draw on Hines’ technology and trends to extract more value
development expertise. We’re actively from their assets. “As a JV partner or a
looking across the product spectrum for the third-party provider, we work with partners
right opportunities where we can apply Claire Thielke to implement that on portfolios that they
08 APAC Real Estate Jun-Jul 2019
HONG KONG
already have or even individual buildings, so that’s Hines in
something that we would look to do here,” she said.
Asia Pacific
The new outpost will also serve as Hines’ Asia
Pacific headquarters, where co-CEO Ray Lawler 1996
will oversee the firm’s activities across the region. Opens first Asia
Pacific office
“The launch of the APAC headquarters in Beijing
really coincides with the launch of Asia
Pacific as its own independent region at
Hines and that’s a very big deal because
it’s been 25 years since Hines has
2001
launched an independent region,” Acquires
Thielke said. Hyundai Motor
Tower, Beijing
“It is a big shift to have Asia Pacific as its own
region with its own flexibility and ability to spread
its wings across numerous markets, while also
continuing to build on the incredible work that our
teams led by David Warneford in Australia and
2002
James Morrison in China.” Hines has had a presence
Completes
in the region since 1996, when it planted its first
Embassy House
outpost in Beijing to oversee its China operations. development,
The firm made its inaugural Asia Pacific acquisition Beijing
in the Chinese capital with the purchase of the 24- Above: Hyundai Motor
storey Hyundai Motor Tower in 2001. It then Tower in Beijing, Hines' first
completed its maiden development, the 32-storey purchase in Asia Pacific.
Embassy House apartment tower in Beijing, in 2002.
Below: The firm's first
The company then established its Australian
2012
APAC development, the
business in 2012, and set up offices in Seoul and Establishes
Tokyo in 2013 and 2017, respectively. Thielke and Embassy House in Beijing. Australian platform
Drew Huffman, who was also appointed director in Sydney
when the new office was announced, will not only
oversee the Hong Kong operations, but will also be
scouting out new business opportunities across the
region. While Hong Kong continues as an important
gateway city to Asia, the special administrative
2013
region has its risks. Advisor Colliers noted that
Sets up
various sectors of Hong Kong’s property market Seoul office
have slowed since the second half of 2018, not to
mention the broader issues of a slowing global
economy and the US-China trade war.
For Thielke, it’s about finding defensive strategies,
as well as taking a rigorous and thoughtful approach
2017
when deploying capital. The Hong Kong team will Establishes
also be looking for opportunities arising from the Tokyo office
Greater Bay Area infrastructure boom that is
connecting Hong Kong, Macau and nine cities
within China’s Guangdong province.
Colliers believes the Greater Bay Area plan and the
likely very slow pace of interest rate increases this
year should “offset any slower economic growth
2019
Opens Asia Pacific
from the trade war”. “We are committed to the
headquarters
region and believe in the underlying fundamentals of
in Hong Kong
it,” Thielke said. “We’re taking a long-term view.”
APAC Real Estate Jun-Jul 2019 09
SOUTH KOREA
Keppel's Alpha seeks out value-add in Seoul
Alpha Investment Partners, the private fund “We are confident that 42,300 sq.m. Yeouido Finance Tower in
management arm of Keppel Capital, is the Yeouido business district (YBD), the
scouting out real estate assets in Seoul after
more can be achieved 20-storey Nonhyun Building in the
acquiring a trio of offices in the South with the establishment Gangnam business district (GBD) and the
Korean capital earlier this year.
of Keppel Capital’s local 13,000 sq.m. Naeja Building in the
The Singapore-based firm is not new to the Gwanghwamun CBD. The Alpha CEO said
city, having managed in excess of US$4bn
asset management arm, the firm improved its assets by expanding
worth of office, retail, logistics and hotel Keppel Investment leasable space, introducing creative design
assets across South Korea since 2004. That
Management (KIM) in works, rejuvenating the properties as well
said, the Keppel Capital group has invested as managing costs. “For instance, we have
more than KRW 680bn (US$570m) in the
Seoul, in 2018.” acquired buildings with relatively low
city since April and has had a local team on In late April, Keppel Capital-managed occupancy rates, and through proactive
the ground to source deals and oversee Keppel REIT exchanged contracts to buy leasing efforts, we have increased the
asset and leasing management for almost a the 28-storey T Tower in Seoul’s CBD occupancies to over 90%, as well as
year. from investment manager PGIM Real improved the average rentals of our assets
“As an active investor in the Seoul market, Estate for KRW 252.6bn, marking the substantially,” he said.
we continue to see attractive opportunities trust’s first office deal in the city. Then in The string of deals follows a record year
that fit well with our value-add investment May, Alpha’s Alpha Asia Macro Trends for office investments in 2018, with total
strategy, in particular for the Alpha Asia Fund III acquired three grade-A office and investments reaching KRW 11 trillion in
Macro Trends Fund series,” Alpha CEO retail complexes in the city for about KRW Seoul, according to advisor Savills. The
Alvin Mah told APAC Real Estate. 430bn. The deal comprised the demand for real estate in Asia’s fourth
10 APAC Real Estate Jun-Jul 2019SOUTH KOREA
largest economy has been strong among
domestic and foreign buyers alike,
especially for offices in the capital.
Limited supply in Seoul has drove the
average vacancy rate for prime offices
down to 11.7% in 1Q19, Savills noted. The
contraction was driven by no new prime
space entering the market, while net
absorption reached 37,200 sq.m. during the
quarter. Co-working operators continue to
expand throughout the city, with
Singapore’s JustCo leasing space at Seoul
Finance Center in the CBD earlier this
year, while IT-related businesses continue
to grow their footprint. Average prime
office rents have increased 1.4% year-on-
year across Seoul, with CBD rents posting
the highest gains at 1.7% YOY.
The supply story is expected to turn around
though, with more than 1.1m sq.m. of new
prime space projected to come onto the
Seoul market over the next five years, says
advisor Colliers. YBD will be the market to
watch, with supply peaking in 2020 when
new grade A offices like the 393,305 sq.m.
Park One and Korea Post Building 68,431
sq.m. are scheduled for completion.
On the investment side, competition has
pushed average prime office cap rates to
mid-4% during the first quarter, according
to Savills. The market is also watching the
South Korean economy closely after GDP
grew by 1.8% YOY in 1Q19, the weakest
rate of growth since 2009, while keeping an
eye on late-cycle conditions and the
ongoing US China trade war.
“While market cycles and political trends
may temporarily impact the office real
estate sector, structural shifts in the market
will play a more definitive role in the Clockwise from top left:
development and use of commercial Seoul prime office vacancy rates, 1Q19 T Tower; Yeouido Finance
Source: Savills Tower; Naeja Building;
space,” Alpha’s Mah said. “For Alpha, we
20%
will stay close to the market, taking a and Nonhyun Building.
pragmatic approach in our investment
strategy.”
15%
Globally, Alpha Investment Partners has
completed more than 160 transactions
worth more than US$20bn in total since 10%
2004. Keppel Capital, which has US$21bn
of assets under management, is the asset
management arm of Keppel Corporation, 5%
the Singapore-listed conglomerate with
offshore and marine, property,
0%
infrastructure and investment businesses. CBD GBD YBD OVERALL
APAC Real Estate Jun-Jul 2019 11CHINA
Singapore’s CDL
pays US$973m JLL's Jim Yip on
Shanghai offices
Q&A
for Chinese
developer, How much investor appetite has there been for Shanghai offices this year?
Shanghai asset
Shanghai’s real estate investment transactions have shown strong signs of growth
since the start of 2019. Foreign capital has become the talk of the town and there
stakes has been no let up from domestic players. JLL statistics show that total transaction
volumes for Shanghai's real estate investment market reached an accumulative
48.9 billion RMB in Q1, representing a year-on-year increase of 136%. China's
Singapore-listed City Developments economic growth is increasingly on a path of stability and sustainability,
Limited (CDL) agreed to buy a 24% stake maintaining a medium-to-high growth rate in recent years. China’s, especially
in Chinese developer Sincere Property Shanghai’s continued reforms and opening up has made it increasingly attractive
Group and a majority stake in one of its to foreign investment. Meanwhile, the increasingly tightening of China's property
Shanghai commercial assets for a financing channels drives cash-strapped companies to offload their high-quality
combined RMB 6.7bn (US$973.3m). The assets for liquidity, thereby shifting market enthusiasm gradually from sellers to
deal marks CDL’s single largest buyers. Financially strong domestic and foreign buyers have more opportunities to
investment in China and expands the find suitable assets in the market.
firm’s geographical presence from 3 cities
to 20, the buyer said in May. Yip is Head of China Capital Markets at JLL
CDL will pay RMB 5.5bn for its stake in
Sincere, gaining board representation as it
becomes the firm’s second-largest EC World REIT CapitaLand sells
shareholder after the target’s founder and
chairman Wu Xu. The Singaporean buys Hangzhou Shanghai office to
logistics property discretionary fund
property firm also purchased a 70%
interest in Sincere’s Shanghai Hongqiao
Sincere Centre, a prime commercial asset
in the heart of Shanghai’s Hongqiao CBD,
for US$164m for US$452m
for RMB 1.2bn. Singapore-listed EC World REIT agreed Singapore-listed CapitaLand has sold the
The 35,739 sq.m. property includes to buy a three-storey e-commerce Innov Center in Shanghai’s Yangpu
offices, serviced apartments, a retail warehouse and two 14-storey offices in the district to its maiden discretionary fund,
component and a basement carpark. Chinese city of Hangzhou for a combined CapitaLand Asia Partners I, for RMB
“Rapid urbanisation, economic growth and S$223.6m (US$164m). The Fuzhou E- 3.1bn (US$451.6m). “Shanghai Innov
rising disposable incomes will continue to Commerce property features 171,795 Center, a predominantly office integrated
drive demand for real estate in China," sq.m. of warehouse space and 42,489 development located in a mature,
said CDL CEO Sherman Kwek. sq.m. of office and auxiliary area, the technology-focused decentralised office
"Leveraging Sincere’s development and buyer announced in May. The fully- market, was acquired in 2017 to be the
asset management capabilities, local occupied property is let to Fuyang Yunton seed asset to kickstart CapitaLand’s
expertise and wide geographical presence E-Commerce and Zhejiang Yuntong E- discretionary fund business,” CapitaLand
in China, CDL will be able to significantly Commerce on five-year leases, with Group CEO and president Lee Chee
boost its scale and accelerate its growth in further five-year options. Koon said.
this huge market with a substantial Hangzhou, the capital of the Zhejiang CapitaLand plans to divest the Pufa
portfolio and pipeline of development province, has a population of 9.8m and is Tower, an office development in
projects and investment properties." one of the core cities in the Yangtze River Shanghai’s prime Lujiazui CBD, to CAP I
Sincere’s founder and chairman Wu Xu Delta Economic Zone. The city, home to as well. A joint venture between the firm
added: "CDL’s investment and support Alibaba Group’s global headquarters, has and an unnamed investor bought a 70%
will be instrumental in accelerating become a hub for e-commerce, where the interest in the 34-storey building for
Sincere’s growth as we continue to sector grew by 17.5% in Hangzhou last RMB2.75bn (S$546m) in January. The
increase our land bank and pipeline of year. EC World REIT invests in real estate real estate firm raised US$391m in the
properties with the aim of achieving even used primarily for e-commerce, supply- first closing of CAP I last month, focusing
stronger sales growth.” chain management and logistics purposes. on assets in Singapore, China and Japan.
12 APAC Real Estate Jun-Jul 2019HONG KONG
Swire Properties,
CMBC sell Hong
Kong tower for
US$605m
Swire Properties, CMBC sell Hong Kong
tower for US$605m Hong Kong-listed
Swire Properties and China Motor Bus
Company (CMBC) have agreed to sell a
26-storey office in Hong Kong’s North
Point area for HK$4.75bn (US$605.2m).
The two vendors separately announced the
disposal of their 50% stakes in the 625
King’s Road property, with Swire
Properties noting that it would record a
HK$965m statutory gain on the sale.
CMBC said they initially received an
unsolicited offer from a special purpose
vehicle owned Gateway Real Estate Fund
VI, a fund managed by Hong Kong-based
Gaw Capital, Mingtiandi reported.
The 28,000 sq.m. grade-A tower is served
by the North Point MTR station and is a
Hong Kong
short distance from the Taikoo Place
Wang On Group Hong Kong loses business community. The office building,
which oversees Victoria Harbour, is
buys Hong Kong Asia Pacific CRE occupied by a mix of financial, investment
and professional services corporations.
asset for US$99m crown to Beijing The deal is expected to close in July this
year. The transaction follows Gaw
Hong Kong-listed Wang On Group and its Beijing became the top Asia Pacific Capital’s HK$12bn acquisition of a
subsidiary Wang On Properties have metropolitan commercial real estate portfolio 12 shopping centres in Hong
agreed to buy a commercial podium at a investment market for the first time, just Kong from Link REIT in December.
Hong Kong residential community for beating Hong Kong in the first quarter of Gaw Capital, which has US$18bn of assets
HK$780m (US$99.4m). The two investors 2019. The Chinese capital recorded under management, has raised five co-
bought the holding company that owned investments totalling US$4.46bn in 1Q19, mingled funds targeting the Greater China
the commercial accommodation of The while Hong Kong reported US$4.42bn, and APAC regions since it was established
Parkside complex, the buyers said in an according to data provider Real Capital in 2005.
announcement. Analytics. The firm also manages value-
The asset, located at 18 Tong Chun Street Beijing leapfrogged to the pole position add/opportunistic funds in Vietnam and the
in the New Territories’ town of Tseung from seventh place in 2018, thanks to two US, as well as a pan-Asia hospitality fund
Kwan O, has 32,564 sq.ft. of total lettable mega deals worth more US$1.3bn. and a European Hospitality Fund.
space, along with 49 car parking spaces. “Traditionally, Beijing was considered a Established in 1972, Swire Properties has
The existing tenancies are all held under a government city, more than a major investments across Hong Kong, mainland
fixed term with the earliest ending this year commercial real estate investment target,” China, Singapore and the US.
and the latest running until 2021. said Petra Blazkova, senior director of Listed on the Hong Kong stock exchange,
The vendor is a vehicle jointly owned by analytics for Asia Pacific at RCA. “Cross- Swire develops and manages commercial,
Angelo, Gordon and Company and Mordril border capital flows, however, appear to be retail, hotel and residential properties such
Properties, according to a Mingtiandi changing the nature of the market and the as Pacific Place mixed-use development in
report. The deal is scheduled to close in city is becoming more appealing to Hong Kong and the Taikoo Li Sanlitun
July this year. institutional investors.” mixed-use complex in Beijing.
APAC Real Estate Jun-Jul 2019 13AUSTRALIA
Dexus buys Centuria enters Salter Brothers
Melbourne office into Australian snap up Brisbane
for US$1bn healthcare hotel for US$103m
Australian REIT Dexus and the Dexus Australian-listed Centuria Capital has Melbourne-based fund manager Salter
Wholesale Property Fund have teamed up expanded into Australia's healthcare real Brothers Group have purchased the Next
to buy an office asset in Melbourne from estate sector after acquiring a majority Hotel in Brisbane from financial services
Brisbane-based QIC Global Real Estate stake in Heathley Limited for A$24.4m firm Challenger for A$150m
for A$1.476bn (US$1.03bn). The 80 (US$16.9m). Heathley is a specialised (US$103.9m). The 4.5-star hotel has 304
Collins Street precinct comprises 105,000 healthcare property fund manager with rooms in the city's Queen Street Mall,
sq.m. of net lettable area in the CBD, A$620m of assets under management, according to the Urban Developer.
including an existing 47-storey grade A including medical centres, day hospitals The property was formerly known as the
office tower, the buyer announced in May. and tertiary aged care. Lennons Hotel Brisbane, but was
The complex also features a new 35-level Following the transaction, the vehicle will refurbished and reopened with Singapore
office tower, a new retail podium with 21 be renamed Centuria Heathley and operator Next Story Group in 2014.
occupiers and a 255-room boutique hotel. Centuria's total AUM will grow to Challenger bought the rebranded asset for
Dexus also raised A$900m in an A$6.2bn. The new vehicle has the capacity A$133m in 2015. The deal grows SBG's
institutional placement to partly fund its to expand to about A$1bn in AUM in the hotel portfolio about A$1bn, made up of
share of the purchase. near term through known potential more than 2,400 rooms across seven hotels
Under the deal, Dexus will own a 75% projects. in Australia. “The transaction represents a
stake and DWPF will hold the outstanding Centuria said the Australian healthcare strong opportunity for us to enter the
25% interest. The buyer said the precinct real estate sector was highly fragmented, Brisbane market at this point in the cycle,
was acquired at a 5.3% equivalent yield with a limited number of securatised and as we expect the market to continue to
and a circa 8% IRR. institutional real estate managers in the recover in the coming years as new supply
“Following the acquisition of 52 and 60 space. is absorbed,” Robert Salter said.
Collins Street last year, this acquisition
further enhances our scale and presence in
the tightly held ‘Paris end’ of the
Melbourne CBD, a prime location where
our customers want to be,” said Dexus
CEO Darren Steinberg. “Importantly,
Savills'
Edward Washer
Q&A
vacancy in the Melbourne CBD office
market is nearing an all-time low,
supported by strong population growth and
on Sydney logistics
significant pre-commitments across the
How active has Sydney's industrial and
upcoming supply pipeline.”
logistics investment market been this year?
80 Collins Street, Melbourne
With a very active 2018, 2019 has seen a significant amount of interest in Sydney’s
industrial and logistics market. Due to drivers in the market, we have had a scarce
level of on-market activity and have therefore not satisfied the demand. Interest
levels have been extremely high, however due to further reduced supply, we haven’t
seen many landmark purchases.
What is your outlook for the rest of the year?
I believe we will see a highly competitive and active back end of the year, due to the
level of interest already in the sector and the amount of active groups that are
seeking core assets in strategic locations. The market has shown there is more
runway to go in the cycle, and I believe we will see yields tighten further to record
levels throughout the second half of 2019. Sydney’s industrial market is heavily
supply-constrained, which will continue to underpin the performance of the market.
Washer is Director & Head of South Sydney office – Industrial & Logistics at Savills
14 APAC Real Estate Jun-Jul 2019AUSTRALIA
Charter Hall fund
bags Adelaide
Melbourne, offices
for US$192m
Charter Hall‘s PFA fund has purchased
two offices in Melbourne and Adelaide for
a combined A$275m (US$192.3m),
marking its first deals in either CBD
market. The fund bought the 737 Bourke
Street building in Melbourne for A$192m
and the 121 King William Street property
in Adelaide for $82.25m, the company
announced in May.
Westfield Burwood shopping centre
Located near Southern Cross train station,
Perth's Perron GPT buys five
the grade-A Melbourne asset offers 18,500
sq.m. of net lettable office and retail area.
buys half share Sydney logistics
The nine-storey property is 98% occupied,
with tenants including Lion Dairy and
Drinks, owned by the global Kirin
Holdings, Symbion Health and the
in Sydney mall warehouses for
Victorian Building Authority.
It has a 5.5-year weighted average lease
for US$398m US$147m
expiry (WALE) and average rent reviews
Perth-based Perron Group has agreed to Australian property firm GPT has snapped
of 3.7% per annum. Charter Hall noted that
acquire a 50% share in the Westfield up five prime logistics properties in Sydney
the Docklands precinct was reaching
Burwood shopping centre in Sydney for A$212m (US$146.8m) and started a
capacity with limited future supply
from Scentre Group for A$575m new development in Melbourne’s west.
opportunities and high tenant demand
(US$398.2m), reflecting a 4.1% premium. The Sydney assets have a total lettable area
driving down the precinct’s prime vacancy
The 63,248 sq.m. shopping centre is of 88,200 sq.m., a combined weighted
rate to 0.7%, as of end-2018.
located near Burwood train station in average lease expiry of 8.6 years and an
“These acquisitions reflect strategic
Sydney’s inner west, Scentre Group initial passing yield of 5.4%.
investments in the core Melbourne and
announced in May. The acquisitions are expected to close in
Adelaide office markets which are
Situated 12km from the CBD, Westfield July, the buyer said in May.
continuing to experience strong tenant
Burwood has 230 stores, including anchor The group, which has A$24bn of assets
demand and effective rental growth,” Head
tenants David Jones, Kmart, Target, Event under management, also started a 26,000
of Charter Hall Direct, Steven Bennett,
Cinemas, Coles and Woolworths. sq.m. logistics project at Truganina in
said. Charter Hall is an Australian-listed
“We are excited by the unique opportunity Melbourne’s west. “These acquisitions and
property fund manager, with A$28.4bn of
to invest in one of the highest quality developments are consistent with GPT’s
assets under management.
shopping centres in Australia,” said Perron strategy to grow our position in the
737 Bourke Street, Melbourne
Group CEO Ross Robertson. “Westfield logistics sector,” said GPT CEO Bob
Burwood is one of the top 50 shopping Johnston. “The assets are all well located
centres in Australia with customer with good access to transport links and will
visitation of more than 14m per annum and benefit from ongoing demand and
total retail sales of close to $500m.” constrained supply.”
The shopping centre was first built in 1966 The deal comes after GPT acquired two
and then later rebuilt in the late 1990s to prime logistics assets and an 8.9-hectare
reopen in 2000. Perron Group already parcel of land in the western Melbourne
owns 50% stakes in Westfield Woden in suburbs of Derrimut and Truganina in
Canberra, Westfield Airport West in February this year. GPT, which owns retail,
Melbourne and Westfield Geelong in the office and logistics, is one of Australia’s
Victorian city of Geelong. largest diversified property groups.
APAC Real Estate Jun-Jul 2019 15JAPAN
Sekisui House
sells office,
housing assets
for US$642m
Japanese developer Sekisui House has sold
three offices and four residential buildings
across Tokyo, Osaka and Kanagawa to its
Sekisui House REIT for JPY 70.14bn
(US$641.8m).
The transaction included the 12,472 sq.m.
Akasaka Garden City office building
valued at JPY 28.7bn in Tokyo’s Minato
ward, the company said in May.
Hilton Tokyo Odaiba hotel The asset is located in a highly-
concentrated business district in central
Japan Hotel REIT Invesco J-REIT Tokyo and is near the Akasaka-mitsuke,
Nagata-cho and Aoyama-itchome train
acquires Tokyo snaps up offices stations.The portfolio featured the 7,341
sq.m. Garden City Shinagawa Gotenyama
hotel for US$561m for US$74m office in Tokyo’s Shinagawa area, as well
as the 12,958 sq.m. Hommachi Minami
Japan Hotel REIT purchased a 453-room Invesco Office J-REIT acquired two offices
Garden City office in Osaka.
hotel in Tokyo for JPY 62.4bn in Tokyo and Yokohama City from Godo
The J-REIT said the Garden City
(US$561.5m) to take advantage of the Kaisha Wing Property for a combined JPY
Shinagawa Gotenyama asset was located in
upcoming 2020 Tokyo Olympics. The 4- 8.14bn (US$74.2m). The REIT acquired
a highly appealing for leading foreign
star Hilton Tokyo Odaiba hotel is located the Otowa Prime Building in Tokyo for
companies, with four nearby trains stations.
in Odaiba, one of the most popular tourist JPY 6.83bn and the Techno Wave 100
The Hommachi Minami Garden City
destinations in the capital, and comes with property in Yokohama City for JPY
property is positioned on Midosuji Street,
multiple Japanese, Western and Chinese 1.31bn. The 5,719 sq.m. Tokyo property is
Osaka’s main street and home to numerous
restaurants and other facilities, the REIT located in the city’s Bunkyo ward, home to
financial institutions including banks and
announced. tertiary institutions including The
insurance companies.
Various events for the Tokyo 2020 University of Tokyo, University of
The portfolio had three Tokyo apartment
Olympics and Paralympics are set to be Tsukuba and Ochanomizu University. The
complexes comprising more than 6,000
held in the Odaiba area. Additionally, the REIT said the property, situated near the
sq.m. of lettable area, as well as the 2,723
international broadcasting centre and main Gokokuji and the Edogawabashi metro
sq.m. Esty Maison Yokohama-aobadai
press centre will be situated at the nearby stations, was a rare find due to a shortage
North residential building in Yokohama, a
Tokyo Big Sight exhibition centre. of office buildings and relatively new
city south of Tokyo.
The transaction grows JHR’s portfolio to buildings available for lease in the area.
The deal will grow Sekisui House REIT’s
43 hotels across the country, totalling JPY The 18-storey Yokohama asset has 50,463
portfolio to 120 properties worth a
374.5bn (US$3.37bn). The deal comes as sq.m. of total floor area and is close to the
combined JPY 527.5bn.
Japan’s number of overseas tourists Kanagawa-Shimmachi train station, which
The deal follows Invesco Office J-
increased 8.7% year-on-year to 32.1m in is one stop away from the Yokohama
REIT’s acquisition of two offices in Tokyo
2018, surpassing the 30m mark for the first central station. A lack of new supply
and Yokohama from Godo Kaisha Wing
time ever, according to advisor Savills. in Yokohama City has pushed the office
Property for a combined JPY 8.14bn
Japanese authorities have set a goal to vacancy rate to about 3%, as of 3Q18. “The
(US$74.2m) earlier this month.
reach 40m annual visitors by 2020, when property is expected to be attractive to
Sekisui House REIT was listed on the
Tokyo hosts the Olympic games. There tenants who look for wide spaces for
Tokyo stock exchange in 2014 and focuses
were JPY 287bn worth of transactions in reasonable rent level in the area
mainly on prime residential, office and
Japan’s hotel investment market in 2018, surrounding Yokohama or Tokyo
hotel real estate across Tokyo, Osaka and
down 3% on the previous year. metropolitan area,” the company said.
Nagoya.
16 APAC Real Estate Jun-Jul 2019JAPAN
LaSalle Logiport ESR purchases J-REIT IIF snaps
REIT acquires Tokyo site for up Japanese
logistics assets US$1bn mega assets for
for US$259m logistics park US$225m
LaSalle Logiport REIT (LLR) agreed to Logistics real estate platform ESR bought a Tokyo-listed Industrial & Infrastructure
buy three warehouses and two land plot in the Greater Tokyo area and plans to Fund (IIF) acquired five commercial
leaseholds located across Tokyo and Osaka invest more than US$1bn to develop it into properties located across Japan worth a
for a combined JPY 28.39bn (US$259.4m). one of the biggest logistics parks in Japan. combined JPY 24.65bn (US$224.9m). IIF,
The Tokyo-listed firm also announced it The initial phase of the ESR Yokohama a J-REIT managed by Mitsubishi Corp-
was divesting its LOGIPORT Hiratsuka Distribution Centre will feature two UBS Realty, purchased the parcel of
Shinmachi warehouse for JPY 7.7bn. modern, four-storey logistics warehouses logistics, manufacturing, research and
The company said the newly-acquired totalling 393,226 sq.m. in gross floor area. development facilities from different
assets comprised large-scale, high The site is located on Tokyo Bay in the sellers, the company said. The firm
specification modern logistics facilities, as southern part of Yokohama, a city in the acquired the IIF Shin-Kawasaki R&D
well as leasehold parcels of land with Kanagawa Prefecture — some 45km from Centre in Kawasaki-shi, a city in the
future redevelopment potential. the Tokyo CBD. “Low vacancy and Greater Tokyo area, from Mitsubishi
In the Greater Tokyo area, the J-REIT continued strong demand coupled with the Logisnext for JPY 6.3bn, reflecting a net
bought the 40,773 sq.m. LOGIPORT constrained supply of premium space operating income (NOI) yield of 7.4%. The
Kashiwa Shonan warehouse from BTS5 around Tokyo Bay makes this Yokohama company bought the 31,071 sq.m. IIF
Real Estate Hanbai GK for JPY 9.3bn, site a rare opportunity,” ESR co-CEO Akishima Logistics Centre in Akishima-
reflecting a net operating income (NOI) Stuart Gibson and ESR president Charles shi, a city in the western part of the Tokyo
yield of 5.1%. de Portes said together in a statement. The Metropolis, from a private seller for JPY
The fully-let asset is located in the Shonan project is backed by ESR’s Redwood Japan 8.02bn, representing a 4.3% NOI yield.
industrial complex, home to many large- Logistics Fund 2, Equity International (EI) The IIF Ichikawa Food Processing Centre
scale logistics facilities, and is near and a major US pension fund. The plot is in Ichikawa, another city in the Greater
National Route 16, where it can service the only 15km from Yokohama Port; 30km Tokyo area, was purchased from
Greater Tokyo area. away from Haneda International Airport; Mitsubishi Corporation Urban
The company bought the 23,565 sq.m. and about 40km from the Port of Tokyo Development for JPY 6.2bn. The company
LOGIPORT Sayama Hidaka warehouse in container terminal. The vacancy rate of also acquired the IIF Hyogo Tatsuno
the Greater Tokyo area from Kawagoe logistics warehouses in the Tokyo Bay area Logistics Centre in Tatsuno-shi, as well as
Nishi GK for JPY 6.43bn at an NOI yield stood at 2.4% at the end of 2018, according the IIF Gifu Kakamigahara Manufacturing
of 4.6%. The fully-occupied property is to advisor CBRE. Centre in the city of Kakamigahara.
also near National Route 16, with good
access to the Tokyo consumption area,
Tama region and Central Saitama region.
In Osaka, the company purchased a 25%
stake in the LOGIPORT Osaka Taisho
property from OTL1 GK for JPY 7.14bn.
LLR also acquired leasehold land at the
Higashi Ogishima site in the Greater Tokyo
area and the Suminoe property in Osaka.
Listed on the Tokyo stock exchange in
2016, LaSalle Logiport REIT invests in
prime logistics real estate across Tokyo and
Osaka. The J-REIT owns a portfolio
comprising 11 properties worth JPY
189.1bn in total. It is sponsored by US-
headquartered LaSalle Investment
Management, which has US$64.3bn of
assets under management.
APAC Real Estate Jun-Jul 2019 17SINGAPORE
Oxley sells
Chevron House
complex for
S$1.025bn
Listed property developer Oxley Holdings
has agreed to dispose of the Chevron
House complex in Singapore for as much
as S$1.025bn (US$758m).
The 24,273 sq.m. property at 30 Raffles
Place features 27 storeys of office
accommodation and a 5-level retail
podium, according to an announcement.
The purchaser, Golden Compass (BVI), is
reportedly a fund managed by US
investment manager AEW, according
to a Mingtiandi report. The deal follows an
unsolicited offer made by AEW for the
asset in March this year.
Oxley said it had commenced
refurbishment works on the property in
Waterway Point mall March that would be completed before the
deal closed.
Frasers Centrepoint Trust buys one- The S$1.025bn deal comprises the
acquisition of Chevron House’s holding
third stake in shopping centre for company, Oxley Beryl, and existing bank
loans.
US$319m Golden Compass will acquire 82.35% of
Oxley Beryl for S$210m on first
Frasers Centrepoint Trust (FCT) has It will also acquire a third interest in FC completion, and then pay the outstanding
acquired a one-third interest in the Retail Trustee, the trustee-manager of SST, amount and take over the existing loans on
Waterway Point mall in Singapore from as well as taking on a S$191m loan. final completion.
another Frasers Property subsidiary for FCT will fund the deal through a private The deal comes after a strong first quarter
S$440.6m (US$319.9m). Waterway Point placement of new units and a non- in Singapore’s commercial real estate
is a 34,485 sq.m. suburban shopping centre renounceable preferential offering of new investment market, according to Colliers.
located next to the Punggol light rail and units to existing unitholders. Office and retail property investment
train station, Frasers Property announced in FCT is listed on the Singapore stock quadrupled year-on-year to S$1.1bn
May. exchange and owns a S$2.77bn portfolio of (US$800m) due to the Manulife Centre and
The property is 98.1% occupied and has a suburban shopping centres throughout Rivervale Mall deals.
wide range of tenants including FairPrice Singapore. “We expect favorable fundamentals in the
Finest, Shaw Theatres, Uniqlo and H&M. It owns the Causeway Point, Northpoint Singapore office market, steady office
The shopping centre had an annual footfall City North Wing, Anchorpoint, YewTee rental growth and a supply shortfall over
of 29.1m in 2018, up 3.9% on the year Point, Bedok 2019-2021 to support investors’ interest for
prior, while tenant sales also rose 10% to Point and Changi City Point malls. commercial properties,” the advisor wrote
S$379.1m last year. Frasers Property said FCT holds an 18.8% stake in PGIM Real in its 1Q19 update.
the mall, valued at S$1.3bn, was located in Estate AsiaRetail Fund, a non-listed retail Oxley Holdings is a Singaporean property
a favourable catchment area supported by fund that owns six malls and an office in developer, with a portfolio of development
strong population growth. Singapore and four shopping centres in and investment projects in Singapore, the
The deal will see FCT acquire a third of Malaysia, as well as a 31.15% stake in United Kingdom, Ireland, Cyprus,
Frasers-owned Sapphire Star Trust (SST), Malaysia-listed retail REIT, Hektar Real Cambodia, Malaysia, Indonesia, China,
which owns the mall. Estate Investment. Myanmar, Australia, Japan and Vietnam.
18 APAC Real Estate Jun-Jul 2019SINGAPORE
Perennial, CapitaLand UOL, UIC buy out
investors sell offloads StorHub Marina Bay
Chinatown Point self-storage partners for
Mall for business for US$499m
US$383m US$136m
Singapore-listed United Industrial
Corporation (UIC) and its parent company
Perennial Real Estate Holdings and a Singapore real estate firm CapitaLand has UOL have taken control of the Marina
consortium of investors, divested its interests in StorHub, one of Square Shopping Mall and Marina
including Singapore Press Holdings, have Singapore’s largest self-storage businesses, Mandarin Hotel in Singapore in a deal
agreed to see their stakes in the Chinatown to an unnamed investor for S$185m worth S$675.3m (US$499.3m). UIC agreed
Point Mall in Singapore in a deal worth (US$136.3m). to buy a combined 24.7% stake from
S$520m (US$383.2m). StorHub’s 74,322 sq.m. portfolio features Singaporean property group OUE and two
The sellers offloaded their interests to a 12 storage facilities, including 11 other vendors in Marina Centre Holdings
fund managed by Pan Asia Realty properties in Singapore and one asset in (MCH) for S$485.3m, according to a
Advisors, which is a joint venture between Shanghai, CapitaLand announced. regulatory announcement. MCH is a
Japan’s Mitsubishi Estate and Hong Kong- Jason Leow, president and CEO of subsidiary of UIC and owns investments in
headquartered CLSA, according to Singapore & International at CapitaLand, the Marina Square retail and commercial
announcements made in April. Chinatown said the sale was part of the group’s capital complex, which comprises the Marina
Point Mall features a retail mall and four recycling plans. Square Shopping Mall and the Marina
strata office units totalling 19,755 sq.m. of “In 2018, CapitaLand divested S$4 billion Square hotels.At the same time, MCH also
net lettable space in the heart of the worth of assets and deployed S$6.11 billion bought a 25% interest in Aquamarina Hotel
Chinatown precinct in Singapore’s CBD. into new investments,” he said. Private Limited (AHPL) from a subsidiary
The deal value includes S$225m in cash for “We will stay disciplined in recycling our of OUE for S$190m. AHPL, which is a
the issued shares, in addition to shareholder assets for reinvestment and capital joint venture between MCH and UIC, owns
loans. Perennial is the largest stakeholder redeployment, with an annual divestment the Marina Mandarin Singapore, one of the
in the asset with a 50.64% interest and will target of at least S$3 billion.” hotels located in the Marina Square retail
gain S$125.3m in net proceeds from the and commercial complex.
One of the StorHub facilities
disposal.
“The divestment is also aligned with
Perennial’s active capital recycling strategy
to rebalance its portfolio and maximise
returns for shareholders,” said Perennial
CEO Pua Seck Guan. Perennial Real Estate
syndicated a group of investors to buy the
asset for S$250m in total in July 2010, and
then invested S$91m into redeveloping the
property.
Perennial Retail Management will continue
in its role as the property manager of
Chinatown Point Mall. Headquartered and
listed in Singapore, Perennial Real Estate is
a real estate owner, developer and manager,
as well as a healthcare services owner.
Perennial Real Estate has a combined real
estate portfolio of more than 6m sq.m.
across China, Singapore, Malaysia,
Indonesia and Ghana.
In Singapore, it has invested in and
manages assets including Capitol
Singapore, CHIJMES, AXA Tower, 111
Somerset and House of Tan Yeok Nee.
APAC Real Estate Jun-Jul 2019 19You can also read
