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Daily Archives: 8 Mar 2010

1 Finlayson Green sold, say sources

Posted on 8 Mar 2010 | Comments Off

Headline price is said to be $145 million

The office block that is 1 Finlayson Green has been sold, BT understands.

Good location: BT understands the deal is being effected through a sale of shares in the company that owns the asset

The price is said to be about $145 million, or 37 per cent below the $230.88 million the seller had paid for the property in June 2007.

A unit of UK-based property fund group Develica is believed to have signed an agreement recently to sell the 19-storey freehold office tower to a foreign-domiciled fund initiated by low-profile Indonesian investor Norman Winata.

BT understands the sale is being effected through a sale of shares in the company that owns the asset.

Develica is understood to have borrowed from National Australia Bank, Hypo Real Estate and Citibank. Market watchers say the three banks would have consented for the sale to take place.

1 Finlayson’s current net lettable area (NLA) is said to be about 89,000 square feet. Based on this, the latest transacted price of $145 million reflects about $1,630 per square foot.

A market watcher described the pricing as ‘about right’. In January, CapitaCommercial Trust sold Robinson Point – a freehold, 21-storey office building – for $203.3 million or $1,527 psf, based on its NLA of 133,139 sq ft. 1 Finalyson Green’s location is considered to be superior, being closer to Raffles Place MRT Station.

For 1 Finlayson Green, some market watchers suggest that there could be some other fees or costs associated with the transaction which could take its net acquisition price above the $145 million headline price paid by the buyer.

When Develica bought the property over two years ago from Singapore’s Hong Leong Group, its NLA was reported to be about 86,500 psf. Develica was later reported to have refurbished the building for $2 million and increased net lettable area by 7 per cent by leasing to one tenant per floor. That would have boosted the property’s NLA to about 92,500 sq ft. However, industry observers have been citing the building’s NLA at between 88,200 and 89,000 sq ft recently.

1 Finlayson Green received its Temporary Occupation Permit in 1994.

Source : Business Times – 8 Mar 2010

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Posted in Office / Retail / Industrial

Tagged 1 Finlayson Green, Singapore Office

Nomura bearish on S’pore developers

Posted on 8 Mar 2010 | Comments Off

It sees pressure on residential prices and low rents impacting sales

THE latest Nomura Singapore Residential Property Report held firm to its bearish stance on local developers, based on expectations of a continued fall in transaction volumes.

Nomura analysts Tony Darwell and Sai Min Chow foresee a downward reassessment of price growth expectations putting pressure on these transaction volumes.

‘Demand for Singapore residential assets appears to be underpinned by the perception of relative value, despite an unprecedented fall in yields,’ the analysts stated in the report.

According to them, a ‘marked compression in residential yields’ had resulted from the divergent forces of asset value growth and falling rents over the last year.

Since early 2009, mass rents and luxury rents have fallen by 6.7 per cent and 14.6 per cent, respectively.

‘With a significant recovery in rentals unlikely, asset prices appear at risk,’ they said.

Residential yields in the mass market are now at 3.53 per cent, compared with 4.14 per cent 12 months ago.

The luxury market also saw its residential yields fall by about 100 basis points over the last 12 months to 2.25 per cent, what the report called ‘an unprecedented historical low’.

Putting additional pressure on asset prices and transaction volumes is the second round of government intervention last month that sought to discourage short-term speculative activity and tighten the supply of credit to the housing market.

‘We believe the government wants to check both volumes and prices, which will likely weigh on the Singapore developers whose stock prices are some 0.75x correlated with transaction volumes,’ the report said.

‘We retain our cautious stance on Singapore-domiciled developers. We believe they are pricing in ‘continued exuberance’, equating to a 25 per cent+ rise in asset prices beyond our expectations over the next 12-24 months – which we see as too optimistic given underlying physical market fundamentals.’

Source : Business Times – 8 Mar 2010