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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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Orchard Central tenants come up empty

Posted on 4 Mar 2010 | Comments Off

Observers cite lack of anchor tenant and complicated layout as reasons for poor business

The empty corridors at Orchard Central make for a woeful sight. One shop has already closed, and tenants have asked landlord Far East Organization for rental rebates. — ST PHOTO: RAJ NADARAJAN

THE tenants at Orchard Central mall, which is barely a year old, say they are struggling to keep their businesses afloat.

The corridors outside the shops are quiet, and walk-in customers are a rare breed – a stark contrast to the buzz at 313@Somerset and Ion Orchard, two malls which also opened last year.

At least one shop at Orchard Central, Fox Salon, has already closed, and tenants say about 70 of them have gone to landlord Far East Organization (FEO) to plead for rental rebates.

Other shops in Orchard Central seem headed the same way as Fox Salon, but some tenants are holding on, for fear of incurring the penalty for breaking their leases.

A beauty parlour owner, who gave her name as Ms Ng, said: ‘We really want to leave this place. How are we to survive here for three more years?’

Each day she stays, she loses about $500, she said.

Her fourth-floor neighbour, Optical 88, is seeing an average of just four customers a day, fewer than at its other outlets in the heartlands.

Only a few shops seem to be keeping their heads above water. One is hair salon La Coco, which markets itself to Korean expatriates. It said it gets about 40 customers a day.

A spokesman for the salon said its Korean stylists keep the regulars returning, but if it had to rely on walk-ins, it too would go under.

Many other tenants declined to comment, saying their landlord had warned them against talking to reporters. This was denied by FEO, which said it was ‘reviewing the performance of the outlets on a month-to-month basis’ and ‘granting rental assistance when appropriate’.

The mall, together with 313@Somerset and Ion Orchard, opened to great fanfare last year, hoping to benefit from a shopping frenzy as the economy emerged from a slump. It pulled in a million shoppers last December.

That was its peak number, said FEO, but it was also the traditional Christmas shopping period. In addition, FEO had pumped $5 million into advertising and promotions to get it off to a good start.

Orchard Central welcomed its first shoppers last May, departing from standard mall conventions in two ways: One was that it was a ‘vertical mall’, with 11 storeys of shops above ground. The other was its absence of anchor tenants.

Mall watchers say these factors may be why it is doing badly. Mr Colin Tan, director of property consultancy Chesterton International, said a mall needs a crowd puller like a cinema or a big department store. He also said that Orchard Central’s labyrinthian layout does it no favours.

Auditor Teng Oon Tang, 24, who said she is unlikely to go back, said: ‘Whenever I go there, I get lost or end up in a dead end. The only good thing it has are the comfortable sofas.’

Mr Ooi Eng Peng, chief executive of Lend Lease, which designed the neighbouring 313@Somerset, said his mall was built for easy navigation and to show off the shops. ‘We’re really happy with the mall. It has caught on as Singaporeans’ favourite.’

Business is booming there, and at Ion Orchard. Nine million shoppers have visited 313@Somerset in three months, and Ion Orchard has been packing in 4.5 million visitors a month.

A check with their tenants confirmed this.

Marche at 313@Somerset says it serves more than 1,500 diners a day. Very Wooonderland, a clothing store in Ion Orchard, averages 100 customers daily and makes about $30,000 a month.

Source : Straits Times – 4 Mar 2010