Thursday, April 21, 2011

Asia Square to boast 600-seat foodcourt

SINGAPORE'S financial district can soon look forward to a new foodcourt at Asia Square Tower 1 which will boast express sub-brands of well-known restaurants such as Imperial Treasure and Astons. It will also feature Singapore's first Triple O outlet, a Hong Kong- based gourmet burger chain owned by a Canadian from Vancouver.

The 13,000 sq ft Food Garden will have a seating capacity of 600 and also offer Indian (Makaan Mumbai), Korean (Manna Korean), Cantonese and Shanghainese cuisine, along with soups, salads, sandwiches, fruits; there will also be a bakery. The Food Garden, to be located at Level 2 of Asia Square Tower 1, will open in the third quarter. The project is behind the One Shenton condo.

The foodcourt will be managed by the building management team of the landlord, MGPA.

MGPA has also secured Citic Bank International as its newest office tenant for Asia Square Tower 1, which will receive its Temporary Occupation Permit (TOP) at the end of June.

Citic has leased 15,000 sq ft in the high-zone of the 43-storey Tower 1. It is expected to move from its current premises at Prudential Tower, where it is said to occupy about 6,000 sq ft.

Asia Square Tower 1's 1.26 million sq ft of offices and 33,800 sq ft of retail space are now over half let. Office rents are said to be in the $11-13 psf a month range depending on the size of the space.

'We are excited that Citic has endorsed our building among other quality banking and finance tenants who have recently leased space, such as Citi, Bank Sarasin and Bank Julius Baer. The marketing of Asia Square has been successful and we expect to conclude a number of other transactions before the TOP in June 2011,' said Simon Treacy, group CEO of MGPA. The real estate investment advisory company owns the Asia Square development through the MGPA Asia Fund III.

Asia Square 46-storey Tower 2, which will have about 780,000 sq ft of offices, 27,000 sq ft of retail space and a 306-room Westin hotel, will be completed in late 2013, Mr Treacy said in a recent interview with BT. MGPA's total investment in the Asia Square development will be about US$4 billion.

MGPA's other major investment here is AXA Tower (formerly known as 8 Shenton Way and Temasek Tower), which it picked up for $1.039 billion or $1,550 psf on NLA in March 2007 from a CapitaLand unit.

With the rapid rise in office capital values after the global financial crisis, MGPA's investment in AXA Tower - held through its Asia Fund II - is comfortably in the black; Mr Treacy said there is a 'reasonable probability' that the circular office block near Tanjong Pagar MRT Station will be sold before the fund expires in 2015.

'The outlook for Singapore overall is very positive. Singapore will continue to attract a variety of industries and among other things it will mean the office market will be a very strong performer. A lot of people would love to be in the position we're in right now,' said Mr Treacy.

He's less bullish on the island's high-end residential sector. Last year, MGPA funds divested its residential holdings in Singapore - 19 apartments at 8 Napier and 162 units at The Cascadia at Bukit Timah Road.

'The high-end residential market in Singapore continues to be somewhat challenging. The medium and long-term drivers are strong, particularly with foreign investors. But there's a lot of stock and (deal) sizes - of more than $10 million for a luxury home - are still quite large for individual investors,' says Mr Treacy.

He rates the potential for returns in the luxury residential sector as being better in China, especially Tier I cities, than in Singapore. On the other hand, the outlook for the office market is stronger for Singapore than China. 'Office demand is probably better in Singapore than in China at the moment. There's still quite a lot of supply in first-tier cities in China, whereas I think in Singapore, the market will work through the supply quite efficiently over the medium term.'

MGPA has about US$500 million uninvested equity for Europe and North Asia (China and Japan). There are no immediate plans to invest further in Singapore, which is home to MGPA's global management team, including its CIO, COO, CFO, executive director, CEO, executive chairman and legal counsel.

Mr Treacy, 42, gets fired up as he talks about his appointment (on July 1) as South Asia chairman for the US-based Urban Land Institute (ULI), a 75-year-old non-profit research and education organisation representing the entire spectrum of land use and real estate development disciplines working in private enterprise and public service.

Mr Treacy says ULI is in talks to work with Singapore think tank The Centre for Liveable Cities to be an active participant in the 2012 World Cities Summit to be held here.

'We're going to use Singapore as a hub to expand ULI's presence around the region, to promote sharing of information and best practices for more desirable outcomes for land use.

'Singapore has done a lot right which other cities around the region want to emulate' - such as URA's first-class planning as seen in Marina Bay and HDB's public housing programme.

'URA is also world class in terms of being very disciplined and clear on its programmes including its tender methods which are very transparent and well proven. There is a lot of clarity and the risks are completely understood. Public tendering of land in other markets is ad hoc and at times not transparent.'

Singapore is now home to the Australian, who was formerly MGPA's Asia CEO based in Hong Kong until he was appointed group CEO last year. He lives in a rental townhouse at Nassim Hill with his family - his Japanese wife and their four-year-old twins (a boy and a girl) and a five-year old son. 'We're enjoying better-quality air than in Hong Kong.'

When he's not travelling on business, Mr Treacy heads off to the Botanic Gardens for his 5 am walk. 'I'm very busy professionally and personally keeping up with the kids.'

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