Wednesday, July 18, 2012

NTUC Income becomes biggest investor in Parkway Parade

Business Times: Wed, Jul 18

[SINGAPORE] NTUC Income Insurance Co-operative has doubled its stake in a fund that owns a chunk of Parkway Parade in a deal that values the space at slightly over $1 billion or about $1,888 per square foot based on current net lettable area.

Income will now be the largest shareholder in the fund with a 46 per cent stake, up from 22 per cent previously.

It is not known if Income is buying any of this increased stake from Australia's Lend Lease group, which last month said that it had trimmed its investment in the fund from 21.1 per cent to 4.9 per cent. Lend Lease said that the fund, Parkway Parade Partnership Limited, is a recapitalisation and extension of the Asia Pacific Investment Company No 2 Limited (Apic 2), and that it has introduced new institutional investors into the fund - but it did not name them. Sources suggest that Aviva could be one of them.

In its release last night, Income said that PGGM Private Real Estate Fund, an investment vehicle for Dutch pension funds, has retained its 33 per cent stake.

Based on earlier media reports, Apic 2's investors - besides Income and Lend Lease - include Malaysia's Employees Provident Fund, and Dutch and Australian pension funds. Lend Lease said last month that it would receive about $144 million in proceeds from the partial sale of its stake and recapitalisation of the fund.

The new Parkway Parade Partnership fund owns the Parkway Parade space previously held by Apic 2 - about 562,611 sq ft of net lettable area, of which about 94 per cent is retail space and the rest, offices.

This does not comprise all of the retail and office space in the strata-titled complex.

Parkway Parade, on a Marine Parade Road site with about 65 years remaining lease, has in total six storeys and one basement level of retail space, and offices rising up to 17 storeys. It has about 1,200 car park lots. The space owned by the fund is nearly fully leased. Major tenants include Isetan, Giant, Cold Storage and Marks & Spencer.

Income chief investment officer Peter Heng said: "Working with our co-investors and property manager (Lend Lease), we will embark on a variety of asset-enhancement initiatives to further enhance Parkway Parade's appeal to tenants and customers and increase its rental yield and asset value over time."

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